Advanced Search
MyIDEAS: Login to save this paper or follow this series

Fixed or Flexible? Wage Setting in Search Equilibrium

Contents:

Author Info

  • Ellingsen, Tore

    ()
    (Dept. of Economics, Stockholm School of Economics)

  • Rosén, Åsa

    ()
    (Dept. of Economics, Uppsala University)

Abstract

Why do some vacancies offer a posted wage whereas others offer a negotiable wage? The paper endogenizes the choice of wage policy in a search model with heterogeneous workers. In particular, we characterize the circumstances under which there exist an equilibrium where all firms negotiate wages. Generally, we find that a tight labor market favors bargaining over posting, as does large worker heterogeneity. In the equilibrium of our model, labor markets are tighter when workers are more productive, suggesting a reason why wages are more often negotiated for highly paid jobs.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://swopec.hhs.se/hastef/papers/hastef0185.pdf.zip
Download Restriction: no

File URL: http://swopec.hhs.se/hastef/papers/hastef0185.pdf
Download Restriction: no

File URL: http://swopec.hhs.se/hastef/papers/hastef0185.ps.zip
Download Restriction: no

File URL: http://swopec.hhs.se/hastef/papers/hastef0185.ps
Download Restriction: no

Bibliographic Info

Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 185.

as in new window
Length: 22 pages
Date of creation: 19 Aug 1997
Date of revision:
Handle: RePEc:hhs:hastef:0185

Contact details of provider:
Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
Email:
Web page: http://www.hhs.se/
More information through EDIRC

Related research

Keywords: Search; wage offers; bargaining; posting;

Other versions of this item:

Find related papers by JEL classification:

References

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.:
as in new window
  1. Peter Diamond, 1985. "Search Theory," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 389, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Dale T. Mortensen, 1982. "The Matching Process as a Noncooperative Bargaining Game," NBER Chapters, National Bureau of Economic Research, Inc, in: The Economics of Information and Uncertainty, pages 233-258 National Bureau of Economic Research, Inc.
  3. Ellingsen, Tore & Rosen, Åsa, 1994. "Skill or Luck? Search Frictions and Wage Differentials," Working Paper Series in Economics and Finance, Stockholm School of Economics 1, Stockholm School of Economics.
  4. Lang, Kevin, 1991. "Persistent Wage Dispersion and Involuntary Unemployment," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 106(1), pages 181-202, February.
  5. Bester, H., 1993. "Price commitment in search markets," Discussion Paper, Tilburg University, Center for Economic Research 1993-9, Tilburg University, Center for Economic Research.
  6. Albrecht, James W & Axell, Bo, 1983. "An Equilibrium Model of Search Unemployment," Working Paper Series, Research Institute of Industrial Economics 99, Research Institute of Industrial Economics.
  7. Dale T. Mortensen, 1988. "Equilibrium Wage Distrihutions: A Synthesis," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 811, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, Elsevier, vol. 3(2), pages 156-168, June.
  9. repec:fth:harver:1517 is not listed on IDEAS
  10. Diamond, Peter A, 1982. "Wage Determination and Efficiency in Search Equilibrium," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 49(2), pages 217-27, April.
  11. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780199279173, October.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hhs:hastef:0185. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helena Lundin).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.