One of my major outlets has decided to cut pay (pay per traffic that is, the rate at which it accumulates) by 40%. An interesting start to a Monday morning and it’s only 7.30 am.
So, am I subject to an income effect, in which I attempt to write more in order to regain that lost income? Or a substitution effect in which I go off and do other things? Upon such questions does the Laffer Curve depend….
Reality is almost certainly that in the short term the income effect will prevail, in the longer term the substitution….