American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Simultaneous Search and Efficiency of Entry and Search Intensity
American Economic Journal: Microeconomics
vol. 9,
no. 3, August 2017
(pp. 245–82)
Abstract
We consider a model where firms open vacancies and post and commit to a wage mechanism. Search is costly and workers simultaneously apply to multiple jobs. Firms can be connected to multiple workers and workers to multiple firms. We use a new method to derive the expected maximum number of matches in a large market as a function of the number of applications and market tightness. We also derive the conditions under which firm entry, worker participation, and search intensity are socially efficient. Finally, we show that a sequential auction under incomplete information can establish the social optimum and discuss some alternative mechanisms that can, under complete information of the entire network, also deliver social efficiency.Citation
Gautier, Pieter A., and Christian L. Holzner. 2017. "Simultaneous Search and Efficiency of Entry and Search Intensity." American Economic Journal: Microeconomics, 9 (3): 245–82. DOI: 10.1257/mic.20160088Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D44 Auctions
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- J23 Labor Demand
- J31 Wage Level and Structure; Wage Differentials
- J64 Unemployment: Models, Duration, Incidence, and Job Search
- M51 Personnel Economics: Firm Employment Decisions; Promotions
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