Labor Associations: The Blue Wall of Silence
Andrea Mattozzi  1@  , David Levine  2@  , Salvatore Modica  3@  
1 : European University Institute  (EUI)  -  Website
2 : EUI
3 : University of Palermo

We provide a model showing that a firm's employees may prefer to protect shirkers because this optimally reduces overall effort. This is the case when labor demand is inelastic and individual behavior is easily monitored. In this case, employees have a strong incentive to conceal information about peers' performance from firms, what has been infamously known as the blue wall of silence in the case of the police.

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