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Efficiency in a search and matching model with right-to-manage bargaining

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  • Sunakawa, Takeki

Abstract

In a search and matching model with right-to-manage bargaining, matched workers and firms bargain over wages, given the firm’s demand schedule for hours per worker. Wages and hours per worker are determined as if they are determined in a competitive labor market with a distortion to wage markups. A positive inefficiency gap in the labor market diminishes workers’ effective bargaining power relative to firms, because firms can adjust labor input and wage schedule via the intensive margin. The Hosios condition does not necessarily hold even when workers’ actual bargaining power is equal to the unemployment elasticity of matches.

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  • Sunakawa, Takeki, 2012. "Efficiency in a search and matching model with right-to-manage bargaining," Economics Letters, Elsevier, vol. 117(3), pages 679-682.
    • Handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:679-682
    DOI: 10.1016/j.econlet.2011.12.072
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    Cited by:

    1. Noritaka Kudoh & Hiroaki Miyamoto, 2021. "General Equilibrium Effects and Labor Market Fluctuations," Working Papers SDES-2021-4, Kochi University of Technology, School of Economics and Management, revised May 2021.
    2. Takeki Sunakawa, 2015. "Optimal Monetary Policy with Labor Market Frictions: The Role of the Wage Channel," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 47(6), pages 1119-1147, September.
    3. Kudoh, Noritaka & Miyamoto, Hiroaki, 2023. "Do general equilibrium effects matter for labor market dynamics?," Economic Modelling, Elsevier, vol. 119(C).

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    More about this item

    Keywords

    Search and matching model; Right-to-manage bargaining; Efficiency;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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