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Directed search with multiple job applications

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Author Info
Galenianos, Manolis
Kircher, Philipp

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Abstract

We develop an equilibrium directed search model of the labor market where workers can simultaneously apply for multiple jobs. Our main theoretical contribution is to integrate the portfolio choice problem faced by workers into an equilibrium framework. All equilibria of our model exhibit wage dispersion. Consistent with stylized facts, the density of wages is decreasing and higher wage firms receive more applications per vacancy. Unlike most models of directed search, the equilibria are not constrained efficient.

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Publisher Info
Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 144 (2009)
Issue (Month): 2 (March)
Pages: 445-471
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:eee:jetheo:v:144:y:2009:i:2:p:445-471

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Web page: http://www.elsevier.com/locate/inca/622869

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Related research
Keywords: Directed search Multiple applications Portfolio choice;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Kenneth Burdett & Shouyong Shi & Randall Wright, 2001. "Pricing and Matching with Frictions," Journal of Political Economy, University of Chicago Press, vol. 109(5), pages 1060-1085, October. [Downloadable!] (restricted)
  2. Dale T. Mortensen & Randall Wright, 2002. "Competitive Pricing and Efficiency in Search Equilibrium," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 1-20, February. [Downloadable!] (restricted)
  3. Fabien Postel-Vinay & Jean-Marc Robin, 2002. "Equilibrium Wage Dispersion with Worker and Employer Heterogeneity," Econometrica, Econometric Society, vol. 70(6), pages 2295-2350, November. [Downloadable!] (restricted)
    Other versions:
  4. Gaumont, Damien & Schindler, Martin & Wright, Randall, 2006. "Alternative theories of wage dispersion," European Economic Review, Elsevier, vol. 50(4), pages 831-848, May. [Downloadable!] (restricted)
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  5. Albrecht, James W & Axell, Bo, 1984. "An Equilibrium Model of Search Unemployment," Journal of Political Economy, University of Chicago Press, vol. 92(5), pages 824-40, October. [Downloadable!] (restricted)
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  6. Robert Shimer, 2001. "The Assignment of Workers to Jobs In an Economy with Coordination Frictions," NBER Working Papers 8501, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Burdett, Kenneth & Judd, Kenneth L, 1983. "Equilibrium Price Dispersion," Econometrica, Econometric Society, vol. 51(4), pages 955-69, July. [Downloadable!] (restricted)
  8. Albrecht, James W. & Gautier, Pieter A. & Vroman, Susan B., 2003. "Matching with multiple applications," Economics Letters, Elsevier, vol. 78(1), pages 67-70, January. [Downloadable!] (restricted)
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  9. Peters, Michael, 2000. "Limits of Exact Equilibria for Capacity Constrained Sellers with Costly Search," Journal of Economic Theory, Elsevier, vol. 95(2), pages 139-168, December. [Downloadable!] (restricted)
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  10. Montgomery, James D, 1991. "Equilibrium Wage Dispersion and Interindustry Wage Differentials," The Quarterly Journal of Economics, MIT Press, vol. 106(1), pages 163-79, February. [Downloadable!] (restricted)
  11. Daron Acemoglu & Robert Shimer, 1999. "Efficient Unemployment Insurance," Journal of Political Economy, University of Chicago Press, vol. 107(5), pages 893-928, October. [Downloadable!] (restricted)
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  12. Richard Rogerson & Robert Shimer & Randall Wright, 2004. "Search-Theoretic Models of the Labor Market-A Survey," NBER Working Papers 10655, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  13. Peters, Michael, 1991. "Ex Ante Price Offers in Matching Games Non-steady States," Econometrica, Econometric Society, vol. 59(5), pages 1425-54, September. [Downloadable!] (restricted)
  14. Moen, Espen R, 1997. "Competitive Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 385-411, April.
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  15. Lones Smith & Hector Chade, 2004. "Simultaneous Search," 2004 Meeting Papers 25, Society for Economic Dynamics.
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  16. Benoit Julien & John Kennes & Ian King, 2000. "Bidding for Labor," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(4), pages 619-649, October. [Downloadable!] (restricted)
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  17. Alain Delacroix & Shouyong Shi, 2003. "Directed Search On the Job and the Wage Ladder," Working Papers shouyong-03-04, University of Toronto, Department of Economics. [Downloadable!]
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  18. James Albrecht & Pieter A. Gautier & Susan Vroman, 2006. "Equilibrium Directed Search with Multiple Applications," Review of Economic Studies, Blackwell Publishing, vol. 73(4), pages 869-891, October. [Downloadable!] (restricted)
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  19. Acemoglu, Daron & Shimer, Robert, 2000. "Wage and Technology Dispersion," Review of Economic Studies, Blackwell Publishing, vol. 67(4), pages 585-607, October.
  20. Shi, Shouyong, 2002. "A Directed Search Model of Inequality with Heterogeneous Skills and Skill-Based Technology," Review of Economic Studies, Blackwell Publishing, vol. 69(2), pages 467-91, April.
  21. Gautier, Pieter A. & Moraga-González, José Luis, 2004. "Strategic Wage Setting and Coordination Frictions with Multiple Applications," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  22. Gerard J. van den Berg & Geert Ridder, 1998. "An Empirical Equilibrium Search Model of the Labor Market," Econometrica, Econometric Society, vol. 66(5), pages 1183-1222, September.
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  23. Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-73, May.
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Kaas, Leo & Zink, Stefan, 2008. "Human Capital Investment with Competitive Labor Search," IZA Discussion Papers 3722, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Shouyong Shi, 2008. "Directed Search for Equilibrium Wage-Tenure Contracts," Working Papers tecipa-343, University of Toronto, Department of Economics. [Downloadable!]
    Other versions:
  3. Gautier, Pieter A & Moraga-González, José-Luis & Wolthoff, Ronald, 2007. "Structural Estimation of Search Intensity: Do Non-Employed Workers Search Enough?," CEPR Discussion Papers 6440, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Pieter A. Gautier & Ronald P. Wolthoff, 2006. "Simultaneous Search with Heterogeneous Firms and Ex Post Competition," IZA Discussion Papers 2056, Institute for the Study of Labor (IZA). [Downloadable!]
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  5. Ken Hori, 2007. "Wage-Directed Job Match with Multiple Applications and Multiple Vacancies: The Optimal Job Application Strategy and Wage Dispersion," Birkbeck Working Papers in Economics and Finance 0711, Birkbeck, School of Economics, Mathematics & Statistics. [Downloadable!]
  6. Matthew Doyle & Jacob Wong, 2008. "Wage Posting Without Full Commitment," Working Papers 08004, University of Waterloo, Department of Economics. [Downloadable!]
    Other versions:
  7. Manolis Galenianos & Philipp Kircher, 2007. "Heterogeneous Firms in a Finite Directed Search Economy," PIER Working Paper Archive 07-003, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania. [Downloadable!]
  8. Ken Hori, 2007. "Multiple Applications Matching Function: An Alternative," Birkbeck Working Papers in Economics and Finance 0706, Birkbeck, School of Economics, Mathematics & Statistics. [Downloadable!]
  9. Jan Eeckhout & Philipp Kircher, 2008. "Sorting and Decentralized Price Competition," PIER Working Paper Archive 08-020, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania. [Downloadable!]
  10. Philipp Kircher, 2008. "Efficiency of Simultaneous Search," PIER Working Paper Archive 08-004, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania. [Downloadable!]
  11. Decreuse, Bruno & Zylberberg, André, 2006. "Job search with ubiquity and the wage distribution," MPRA Paper 3630, University Library of Munich, Germany, revised May 2007. [Downloadable!]
    Other versions:
  12. Feng, Shuaizhang & Zheng, Bingyong, 2009. "Cherry-Picking in Labor Market with Imperfect Information," IZA Discussion Papers 4309, Institute for the Study of Labor (IZA). [Downloadable!]
  13. Galenianos, Manolis & Kircher, Philipp & Virag, Gabor, 2009. "Market Power and Efficiency in a Search Model," MPRA Paper 17093, University Library of Munich, Germany. [Downloadable!]
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