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A Search Model of Unemployment and Firm Dynamics

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  • Matteo Richiardi

Abstract

An urn-ball probabilistic model of the labour market is developed. Agents can be employed, (voluntary or involuntary) unemployed or entrepreneurs. The analytical long run equilibrium probabilities for each state and the matching function are derived. Then, the out-of-equilibrium dynamics are investigated through an agent-based simulation, which provides also results on firm demography. The simulation model is finally used to investigate departures from maximizing individual behaviour and the effects of more realistic assumptions about profits and the business cycle.

Suggested Citation

  • Matteo Richiardi, 2003. "A Search Model of Unemployment and Firm Dynamics," LABORatorio R. Revelli Working Papers Series 30, LABORatorio R. Revelli, Centre for Employment Studies.
    • Handle: RePEc:cca:wplabo:30
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. M. Neugart, 2004. "Endogenous Matching Functions: An Agent-Based Computational Approach," World Scientific Book Chapters, in: Roberto Leombruni & Matteo Richiardi (ed.), Industry And Labor Dynamics The Agent-Based Computational Economics Approach, chapter 6, pages 90-106, World Scientific Publishing Co. Pte. Ltd..
    2. Damdinsuren, Erdenebulgan & Zaharieva, Anna, 2023. "Expectation formation and learning in the labour market with on-the-job search and Nash bargaining," Labour Economics, Elsevier, vol. 81(C).
    3. Neugart, Michael, 2006. "Labor market policy evaluation with an agent-based model," MPRA Paper 4726, University Library of Munich, Germany.
    4. Matteo Richiardi, 2006. "Toward a Non-Equilibrium Unemployment Theory," Computational Economics, Springer;Society for Computational Economics, vol. 27(1), pages 135-160, February.
    5. André Veski & Kaire Põder, 2018. "Zero-intelligence agents looking for a job," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 13(3), pages 615-640, October.
    6. Neugart, Michael, 2008. "Labor market policy evaluation with ACE," Journal of Economic Behavior & Organization, Elsevier, vol. 67(2), pages 418-430, August.
    7. Michael Neugart & Matteo G. Richiardi, 2012. "Agent-based models of the labor market," LABORatorio R. Revelli Working Papers Series 125, LABORatorio R. Revelli, Centre for Employment Studies.

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    More about this item

    Keywords

    Unemployment; Jobs; Startup; Vacancies; Search; Simulation.;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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