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Competing Auctions of Skills

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  • John Kennes

    () (Department of Economics and Business Economics, Aarhus University, Denmark)

  • Daniel le Maire

    () (Department of Economics, University of Copenhagen, Denmark)

Abstract

We generalize McAfee’s (1993) game of competing sellers to the case of heterogeneous sellers. In the generalized McAfee (GM) game, the equilibrium expected job offer distribution of each worker (seller) type evolves over time as a function of stochastic events. We derive a tractable method of solving the GM game. We estimate, using non-parametric methods, a close fit between a benchmark GM game and a cross-section of Danish data on productivity and unemployment. The theoretical properties of the GM game, which relate to on-the-job search, assortative matching, aggregate and match specific shocks, and the equivalence of alternative games, are also characterized.

Suggested Citation

  • John Kennes & Daniel le Maire, 2016. "Competing Auctions of Skills," Economics Working Papers 2016-02, Department of Economics and Business Economics, Aarhus University.
  • Handle: RePEc:aah:aarhec:2016-02
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Auctions; assortative matching; wage dispersion; aggregate shocks; on-the-job search;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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