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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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    References listed on IDEAS

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    1. Balazs Egert & Lubos Komarek, 2005. "Foreign Exchange Interventions and Interest Rate Policy in the Czech Republic: Hand in Glove?," Working Papers 2005/07, Czech National Bank, Research Department.
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    3. Jesus Crespo Cuaresma & Balázs Égert & Ronald MacDonald, 2004. "Nonlinear Exchange Rate Dynamics in Target Zones," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), pages 46-69.
    4. Mikael Bask & Jarko Fidrmuc, 2009. "Fundamentals and Technical Trading: Behavior of Exchange Rates in the CEECs," Open Economies Review, Springer, pages 589-605.
    5. Crespo Cuaresma, Jesús & Fidrmuc, Jarko & MacDonald, Ronald, 2003. "The monetary approach to exchange rates in the CEECs," BOFIT Discussion Papers 14/2003, Bank of Finland, Institute for Economies in Transition.
    6. Andrew Bauer & Robert A. Eisenbeis & Daniel F. Waggoner & Tao Zha, 2006. "Transparency, expectations and forecasts," Economic Review, Federal Reserve Bank of Atlanta, issue Q 1, pages 1-25.
    7. Smirnova, Natalia, 2003. "Job search behavior of unemployed in Russia," BOFIT Discussion Papers 13/2003, Bank of Finland, Institute for Economies in Transition.
    8. Baillie, Richard T & Bollerslev, Tim, 2002. "The Message in Daily Exchange Rates: A Conditional-Variance Tale," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 60-68, January.
    9. Jesus Crespo-Cuaresma & Jarko Fidrmuc & Ronald MacDonald, 2005. "The monetary approach to exchange rates in the CEECs," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(2), pages 395-416, April.
    10. Mikael Bask & Jarko Fidrmuc, 2009. "Fundamentals and Technical Trading: Behavior of Exchange Rates in the CEECs," Open Economies Review, Springer, pages 589-605.
    11. Egert, Balazs & Komarek, Lubos, 2006. "Foreign exchange interventions and interest rate policy in the Czech Republic: Hand in glove?," Economic Systems, Elsevier, vol. 30(2), pages 121-140, June.
    12. Paul Grauwe & Gunther Schnabl, 2005. "Nominal Versus Real Convergence - EMU Entry Scenarios for the New Member States," Kyklos, Wiley Blackwell, vol. 58(4), pages 537-555, November.
    13. Coricelli, Fabrizio & Jazbec, Bostjan & Masten, Igor, 2006. "Exchange rate pass-through in EMU acceding countries: Empirical analysis and policy implications," Journal of Banking & Finance, Elsevier, vol. 30(5), pages 1375-1391, May.
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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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