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Directed search with multiple job applications

  • Manolis Galenianos
  • Philipp Kircher

We develop an equilibrium directed search model of the labor market where workers can simultaneously apply for multiple jobs. Our main theoretical contribution is to integrate the portfolio choice problem faced by workers into an equilibrium framework. All equilibria of our model exhibit wage dispersion. Consistent with stylized facts, the density of wages is decreasing and higher wage firms receive more applications per vacancy. Unlike most models of directed search, the equilibria are not constrained efficient.

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File URL: http://eprints.lse.ac.uk/29702/
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Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 29702.

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Date of creation: Mar 2009
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Publication status: Published in Journal of Economic Theory, March, 2009, 144(2), pp. 445-471. ISSN: 1095-7235
Handle: RePEc:ehl:lserod:29702
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