Cookies?
Library Header Image
LSE Research Online LSE Library Services

Search, economics of

Pissarides, Christopher (2001) Search, economics of. In: Smelser, Neil J. and Baltes , Paul B., (eds.) International Encyclopedia of the Social and Behavioral Sciences. Elsevier, Oxford, UK, pp. 13760-13768. ISBN 9780080430768

Full text not available from this repository.

Abstract

The economics of search study the implications of frictions for individual behavior and market performance, due usually to imperfect information about exchange possibilities. This article reviews labor-market research in this area. Individuals search for a job offer by choosing a reservation wage and accepting jobs that pay above that wage. Firms create jobs to maximize profit. The probability of realizing a match is derived from an aggregate matching function that gives the number of jobs formed in terms of the search efforts of firms and workers. Because of monopoly rents implied by frictions, wages are determined either by bargaining or by take-it-or-leave- it offers posted by firms. Bargaining models share the surplus and give rise to a single wage for homogeneous labor that in general does not allocate jobs efficiently. Wage posting can give rise to a single wage equal to the worker's reservation wage if the worker can only observe one wage offer at a time, or to the efficient allocation if posted wages can be observed but there are job queues, or to a distribution of wage offers if employed workers can sample more than one firm at a time. Job destruction is due either to job-specific shocks or to technological obsolescence.

Item Type: Book Section
Official URL: http://www.elsevier.com/wps/find/homepage.cws_home
Additional Information: © 2001 Elsevier Ltd.
Library of Congress subject classification: H Social Sciences > H Social Sciences (General)
Sets: Departments > Economics
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 06 Apr 2011 13:44
URL: http://eprints.lse.ac.uk/33912/

Actions (login required)

Record administration - authorised staff only Record administration - authorised staff only