Variable Search Intensity with Coordination Unemployment
AbstractThis paper analyzes an urn-ball matching model in which workers decide how intensively they sample job openings and apply at a stochastic number of suitable vacancies. The model allows for tractable equilibrium characterization with a continuous search intensity margin. Equilibrium is not constrained efficient; entry is excessive, search intensity can be too high or too low, and an inefficient discouraged-worker effect among homogenous workers emerges under adverse labor market conditions. Unlike existing coordination-friction economies with fixed search intensity, the model can account for the empirical relation between the job-finding rate and the vacancy-unemployment ratio, provided that search costs are small and that search intensity is sufficiently procyclical.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Macroeconomics.
Volume (Year): 10 (2010)
Issue (Month): 1 (October)
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Web page: http://www.degruyter.com
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- Paul Gomme & Damba Lkhagvasuren, 2011.
"The Cyclicality of Search Intensity in a Competitive Search Model,"
11003, Concordia University, Department of Economics.
- Paul Gomme & Damba Lkhagvasuren, 2013. "The Cyclicality of Search Intensity in a Competitive Search Model," Working Papers 13002, Concordia University, Department of Economics, revised Sep 2013.
- Gomis-Porqueras, Pedro & Julien, Benoit & Chengsi, Wang, 2012.
"Informative Advertising in Directed Search,"
38057, University Library of Munich, Germany.
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