I am very surprised that you see Ronald’s explanation in contrast to Nancy’s. Income-smoothing is the only example she gives that does not look to me like a transaction cost. I think the economics party line is that the transaction costs will be split between the employee and the firm, with agnosticism about who will get the bulk of the benefit.
I am very surprised that you see Ronald’s explanation in contrast to Nancy’s. Income-smoothing is the only example she gives that does not look to me like a transaction cost. I think the economics party line is that the transaction costs will be split between the employee and the firm, with agnosticism about who will get the bulk of the benefit.