{{ block title }} Phase 1: Firm {{ endblock }} {{ block content }} {{ if session.choice_condition == True and session.capped_condition == False }}
In Phase 1, the firm decides whether to enter the labor market (see screenshot below).
If the firm decides to exit the labor market, then the labor market for that round ends and both the firm and the employee receive zero Lira for the round.
If the firm decides to enter the labor market, the firm decides who will set the employee’s wage (see screenshot below).
If the firm decides to let the employee set the wage, both the firm and employee proceed to Phase 2: Employee.
If, instead, the firm decides to set the employee’s wage, then the firm chooses a wage level for the employee (see screenshot below).
The employee’s wage must be an integer between 20 Lira and 120 Lira (inclusive). That is, the employee’s wage must be in the range {20, 21, 22, …, 118, 119, 120}.
{{ if session.fixed_contract_condition == True }}This wage is fixed, meaning, the employee will receive the wage regardless of the production level.
{{ else }}This wage depends on the production level, meaning, the employee will receive the wage according to the following:
Wage =
A table of possible payoffs associated with the wage amount and any production level will be provided. Once a wage has been inserted, the firm may select “Calculate Payoffs”. The table cells will then populate with the associated payoffs for the firm and employee based on the inserted wage amount and any production level. For example, suppose a wage of 70 Lira was entered and the firm selected “Calculate Payoffs”, the table would populate with the following values (see table below).
{{ if session.fixed_contract_condition == True }}| Production Level | 0.1 | 0.2 | 0.3 | 0.4 | 0.5 | 0.6 | 0.7 | 0.8 | 0.9 | 1.0 |
|---|---|---|---|---|---|---|---|---|---|---|
| Firm Payoff | -58 | -46 | -34 | -22 | -10 | 2 | 14 | 26 | 38 | 50 |
| Employee Payoff | 70 | 69 | 68 | 66 | 64 | 62 | 60 | 58 | 55 | 52 |
| Production Level | 0.1 | 0.2 | 0.3 | 0.4 | 0.5 | 0.6 | 0.7 | 0.8 | 0.9 | 1.0 |
|---|---|---|---|---|---|---|---|---|---|---|
| Firm Payoff | -3 | 9 | 21 | 33 | 45 | 57 | 69 | 81 | 93 | 50 |
| Employee Payoff | 15 | 14 | 13 | 11 | 9 | 7 | 5 | 3 | 0 | 53 |
The firm may enter a new wage amount and click “Calculate Payoffs” as many times as they wish to observe payoffs for varying wage levels.
Production level and production cost will be explained in Phase 2.
{{ elif session.choice_condition == True and session.capped_condition == True }}
In Phase 1, the firm decides whether to enter the labor market (see screenshot below).
If the firm decides to exit the labor market, then the labor market for that round ends and both the firm and the employee receive zero Lira for the round.
If the firm decides to enter the labor market, the firm decides who will set the employee’s wage (see screenshot below).
If the firm decides to let the employee set the wage, then the firm sets a wage cap, or maximum wage amount, for the employee (see screenshot below).
The employee’s wage must be an integer between 20 Lira and 120 Lira (inclusive). That is, the employee’s wage must be in the range {20, 21, 22, …, 118, 119, 120}. The firm may set a cap anywhere between 20 and 120 (inclusive). The employee will not be able to set their wage above the firm’s cap amount. The employee learns what the cap is before setting their wage.
If, instead, the firm decides to set the employee’s wage, then the firm chooses a wage level for the employee (see screenshot below).
Again, the employee’s wage must be an integer between 20 Lira and 120 Lira (inclusive). That is, the employee’s wage must be in the range {20, 21, 22, …, 118, 119, 120}.
{{ if session.fixed_contract_condition == True }}This wage is fixed, meaning, the employee will receive the wage regardless of the production level.
{{ else }}This wage depends on the production level, meaning, the employee will receive the wage according to the following:
Wage =
A table of possible payoffs associated with the wage amount and any production level will be provided. Once a wage has been inserted, the firm may select “Calculate Payoffs”. The table cells will then populate with the associated payoffs for the firm and employee based on the inserted wage amount and any production level. For example, suppose a wage of 70 Lira was entered and the firm selected “Calculate Payoffs”, the table would populate with the following values (see table below).
{{ if session.fixed_contract_condition == True }}| Production Level | 0.1 | 0.2 | 0.3 | 0.4 | 0.5 | 0.6 | 0.7 | 0.8 | 0.9 | 1.0 |
|---|---|---|---|---|---|---|---|---|---|---|
| Firm Payoff | -58 | -46 | -34 | -22 | -10 | 2 | 14 | 26 | 38 | 50 |
| Employee Payoff | 70 | 69 | 68 | 66 | 64 | 62 | 60 | 58 | 55 | 52 |
| Production Level | 0.1 | 0.2 | 0.3 | 0.4 | 0.5 | 0.6 | 0.7 | 0.8 | 0.9 | 1.0 |
|---|---|---|---|---|---|---|---|---|---|---|
| Firm Payoff | -3 | 9 | 21 | 33 | 45 | 57 | 69 | 81 | 93 | 50 |
| Employee Payoff | 15 | 14 | 13 | 11 | 9 | 7 | 5 | 3 | 0 | 53 |
The firm may enter a new wage amount and click “Calculate Payoffs” as many times as they wish to observe payoffs for varying wage levels.
Production level and production cost will be explained in Phase 2.
{{ elif session.choice_condition == False and session.session_employee_set == True}}
In Phase 1, the firm decides whether to enter the labor market (see screenshot below).
If the firm decides to exit the labor market, then the labor market for that round ends and both the firm and the employee receive zero Lira for the round.
If the firm decides to enter the labor market, both the firm and employee proceed to Phase 2.
{{ else }}
In Phase 1, the firm decides whether to enter the labor market (see screenshot below).
If the firm decides to exit the labor market, then the labor market for that round ends and both the firm and the employee receive zero Lira for the round.
If the firm decides to enter the labor market, then the firm chooses a wage level for the employee (see screenshot below).
The employee’s wage must be an integer between 20 Lira and 120 Lira (inclusive). That is, the employee’s wage must be in the range {20, 21, 22, …, 118, 119, 120}.
This wage is fixed, meaning, the employee will receive the wage regardless of the production level.
A table of possible payoffs associated with the wage amount and any production level will be provided. Once a wage has been inserted, the firm may select “Calculate Payoffs”. The table cells will then populate with the associated payoffs for the firm and employee based on the inserted wage amount and any production level. For example, suppose a wage of 70 Lira was entered and the firm selected “Calculate Payoffs”, the table would populate with the following values (see table below).
| Production Level | 0.1 | 0.2 | 0.3 | 0.4 | 0.5 | 0.6 | 0.7 | 0.8 | 0.9 | 1.0 |
|---|---|---|---|---|---|---|---|---|---|---|
| Firm Payoff | -58 | -46 | -34 | -22 | -10 | 2 | 14 | 26 | 38 | 50 |
| Employee Payoff | 70 | 69 | 68 | 66 | 64 | 62 | 60 | 58 | 55 | 52 |
The firm may enter a new wage amount and click “Calculate Payoffs” as many times as they wish to observe payoffs for varying wage levels.
Production level and production cost will be explained in Phase 2.
{{ endif }}The firm may then select "Next" to proceed to Phase 2.
{{ next_button }} {{ endblock }}