Manning, Alan ORCID: 0000-0002-7884-3580
(2025)
The immobile incumbent problem in a model of short-term wage-posting.
German Economic Review.
ISSN 1468-0475
(In Press)
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Text (ImmobileIncumbent (002))
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Pending embargo until 1 January 2100. Available under License Creative Commons Attribution. Download (459kB) |
Abstract
This paper takes the canonical Burdett-Mortensen model of wageposting and relaxes the assumption that wages are set once-for-all, instead assuming they can only be committed one period at a time. It derives a closed-form solution for a steady-state Markov Rank- Preserving Equilibrium and shows how this relates to the canonical model and performs some comparative statics on it. But it is shown that a Rank-Preserving Equilibrium may fail to exist because employers have more monopsony power over existing workers than new recruits and that this non-existence can be a problem for plausible parameter values. It is shown how a Rank-Inverting Equilibrium may exist. It is argued that this problem is likely to occur in a wide range of search models.
Item Type: | Article |
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Additional Information: | © 2025 The Author(s) |
Divisions: | Economics |
Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HB Economic Theory |
Date Deposited: | 03 Mar 2025 14:54 |
Last Modified: | 03 Mar 2025 15:03 |
URI: | http://eprints.lse.ac.uk/id/eprint/127471 |
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