Franchise businesses have long been plagued by scandals. Domino’s is just the latest

The blue and red boxes with white dots are immediately recognisable as containing Domino’s pizzas. The pizza chain is Australia’s largest and is run as a franchise, with the ASX-listed public company Domino’s Pizza Enterprises holding the Australian master franchise rights.

Industry analysts IBISWorld calculate Domino’s has 4.2% of the fast food and takeaway market in Australia.

Labor supply response to windfall gains

Using a large survey of euro area consumers, we conduct an experiment in which respondents report how they would adjust their labor market participation, hours worked, and job search effort (if not employed) in response to randomly assigned windfall gain scenarios. Windfall gains reduce labor supply, but only when the gains are substantial. At the extensive margin, gains of €25,000 or less have no effects, while gains between €50,000 and €100,000 reduce the probability of working by 1.5 to 3.5 percentage points.

Labor supply response to windfall gains

Using a large survey of euro area consumers, we conduct an experiment in which respondents report how they would adjust their labor market participation, hours worked, and job search effort (if not employed) in response to randomly assigned windfall gain scenarios. Windfall gains reduce labor supply, but only when the gains are substantial. At the extensive margin, gains of €25,000 or less have no effects, while gains between €50,000 and €100,000 reduce the probability of working by 1.5 to 3.5 percentage points.

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