We analyze a model of directed search in which unemployed job seekers observe all posted wages. We allow for the possibility of multiple applications by workers and ex post competition among vacancies. For any number of applications, there is a unique symmetric equilibrium in which vacancies post a common wage. When workers apply to only one vacancy, a single wage is paid and the resulting equilibrium is efficient. When workers make multiple applications, there is dispersion in wages paid, and equilibrium may be inefficient. We show that our results also hold in a steady-state version of the model.
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Paper provided by Georgetown University, Department of Economics in its series Working Papers with number
gueconwpa~03-03-02.
Length: Date of creation: Date of revision: Handle: RePEc:geo:guwopa:gueconwpa~03-03-02
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Find related papers by JEL classification: J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
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.:
Albrecht, James W. & Gautier, Pieter A. & Vroman, Susan B., 2003.
"Matching with multiple applications,"
Economics Letters,
Elsevier, vol. 78(1), pages 67-70, January.
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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.
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Julien, B. & Kennes, J. & King, I., 1998.
"Bidding for Labour,"
Discussion Papers
dp98-03, Department of Economics, Simon Fraser University.
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Hector Chade & Lones Smith, .
"Simultaneous Search,"
Working Papers
2168591, Department of Economics, W. P. Carey School of Business, Arizona State University.
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