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Does Bargaining Matter in the Small Firm’s Matching Model?

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  • Olivier LHARIDON

    (University of Rennes 1 - CREM-CNRS)

  • Franck MALHERBET

    (Ecole Polytechnique)

  • Sébastien PEREZ-DUARTE

    (BCE.)

Abstract

In this article, we use a stylized model of the labor market to investigate the effects of three alternative and well-known bargaining solutions. We apply the Nash, the Egalitarian and the Kalai-Smorodinsky bargaining solutions in the small firm’s matching model of unemployment. We first show that the Egalitarian and the Kalai-Smorodinsky solutions are easily implementable within search-matching economies. Second, we show that the differences between the three solution are weaker than expected. This contrasts with some of the main results obtained by the recent literature.

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Bibliographic Info

Paper provided by Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS in its series Economics Working Paper Archive (University of Rennes 1 & University of Caen) with number 201116.

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Date of creation: Sep 2011
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Handle: RePEc:tut:cremwp:201116

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Keywords: appariement; négociations; jeux coopératifs.;

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Cited by:
  1. Bruno Jacquet & Etienne Lehmann & Bruno Van der Linden, 2011. "Optimal Redistributive Taxation with both Labor Supply and Labor Demand Responses," Working Papers 2011-15, Centre de Recherche en Economie et Statistique.
  2. Laurence Jacquet & Etienne Lehmann & Bruno Linden, 2014. "Optimal income taxation with Kalai wage bargaining and endogenous participation," Social Choice and Welfare, Springer, vol. 42(2), pages 381-402, February.

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