Wage Bargaining in a Multiple Application Search Model with Recall
AbstractIn this paper I extend the multiple application urn-ball game structure, introduced by Gautier and Moraga-Gonzalez (2004) and Albrecht, Gautier, and Vroman (2006), to an scenario where firms can, after a rejection, make additional wage offers. This expands the game structure from a one-shot set up to a sequential game. A firm, after being rejected by an applicant, can choose another applicant to make him a new wage o¤er. This possibility gives firms an outside option after a rejection. This increases the bargaining power of firms, implying a change in their wage offer behavior. The resulting wage distribution is hump-shaped with the density of wage offers concentrated on central values, rather than in extreme values.
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Bibliographic InfoPaper provided by Universidad de Guanajuato, Department of Economics and Finance in its series Department of Economics and Finance Working Papers with number EC201001.
Length: 33 pages
Date of creation: Feb 2010
Date of revision:
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More information through EDIRC
Matching; Labor Market; Multiple application; Wage distribution;
Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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