Effects of...
Efficiency Wage Models
Shirking Model
Intuition:
Labor Turnover
Intuition:
Adverse Selection
Intuition: This problem occurs before the implementation of the contract, and thus is the opposite of the moral hazard problem (agent changes behavior after contract). A great example (future class) is the White Elephant gift game (or many pranks). In the labor market, this would mean that employers want to offer higher-than-market-clearing wages off the bat in order to especially attract high-productivity people to their pool of applicants.
Sociological Model
Intuition: