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Strategic Referring in Labor Market Social Networks

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Abstract

We present a model of job search in which information about job opportunities is available either through direct search at the labor market or through network of socially tied individuals. We consider two cases - altruistic and self-interested agents that maximize their utility function. We show that optimal strategies range between full and no referring cases. Altruistic individuals tend to refer more than selfinterested agents. Strategic referring allows agents alleviate employment variation and leads to higher average utility levels and lower unemployment rates.

Suggested Citation

  • Natálie Reichlová & Petr Švarc, 2006. "Strategic Referring in Labor Market Social Networks," Working Papers IES 2006/29, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Dec 2006.
  • Handle: RePEc:fau:wpaper:wp2006_29
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    File URL: http://ies.fsv.cuni.cz/default/file/download/id/6420
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    More about this item

    Keywords

    agent-based modeling; networks; strategy; job referring;

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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