Research of truman bewley and the experimental evidence

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Reference no: EM133067162

Use the best response diagram to sketch the results found by Lazear and co-authors in their study of a firm during the global financial crisis.

Draw a best response curve for each of the following years and explain what it illustrates:

  1. the pre-crisis period (2006)
  2. the crisis years (2007-8)
  3. the post-crisis year (2009)

Is there a reason why a firm might not cut wages during a recession? Think about the research of Truman Bewley and the experimental evidence about reciprocity in Unit 4.

Reference no: EM133067162

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