Efficiency of simultaneous search

Kircher, Philipp (2009) Efficiency of simultaneous search. Journal of Political Economy, 117 (5). pp. 861-913. ISSN 0022-3808

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Abstract

This paper presents an equilibrium labor search model in which workers can simultaneously apply to multiple firms to increase their search intensity. They observe firms’ wage postings before choosing where to apply. Owing to coordination frictions, a firm may not receive any applications; otherwise it is able to hire unless all its applicants have better offers. It is shown that the equilibrium converges to the efficient Walrasian outcome as application costs vanish. Even for nonnegligible application costs, the entry of firms, the search intensity, and the number of filled vacancies are constrained efficient. Wage dispersion is essential for constrained efficiency.

Item Type:	Article
Official URL:	http://www.journals.uchicago.edu/toc/jpe/current
Additional Information:	© 2009 by The University of Chicago
Divisions:	Economics
Subjects:	H Social Sciences > HB Economic Theory
JEL classification:	J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J63 - Turnover; Vacancies; Layoffs
Date Deposited:	20 Oct 2010 08:31
Last Modified:	08 Oct 2024 19:12
URI:	http://eprints.lse.ac.uk/id/eprint/29703

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