A way of explaining unemployment through a wage-setting game
AbstractWe investigate a duopsonistic wage-setting game in which the firms have a limited number of workplaces. We assume that the firms have heterogeneous productivity, that there are two types of workers with different reservation wages and that a worker's productivity is independent of his type. We show that equilibrium unemployment arises in the wage-setting game under certain conditions, although the efficient allocation of workers would result in full employment.
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Bibliographic InfoPaper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse14_2003.
Date of creation: Jul 2003
Date of revision:
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Unemployment; Bertrand-Edgeworth; wage-setting games;
Other versions of this item:
- Tasnadi, Attila, 2005. "A way of explaining unemployment through a wage-setting game," Labour Economics, Elsevier, vol. 12(2), pages 191-203, April.
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-01-12 (All new papers)
- NEP-LAB-2004-01-12 (Labour Economics)
- NEP-MAC-2004-01-12 (Macroeconomics)
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