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Reduced form wage equations in the credible bargaining model

Author

Listed:
  • Vincent Boitier

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Antoine Lepetit

    (Centre de recherche de la Banque de France - Banque de France)

Abstract

We derive an analytical solution for the wage from an alternating-offer wage bar-gaining game à la Hall and Milgrom (2008) under a plausible parameter restriction. This solution is simple, micro-founded and permits a transparent analysis of the driv-ing forces of wages. We argue that it can be used in a wide range of economic models incorporating the search and matching theory of unemployment to simplify the anal-ysis and obtain more easily interpretable results.

Suggested Citation

  • Vincent Boitier & Antoine Lepetit, 2018. "Reduced form wage equations in the credible bargaining model," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01088831, HAL.
    • Handle: RePEc:hal:cesptp:hal-01088831
    DOI: 10.1016/j.labeco.2016.04.003
    Note: View the original document on HAL open archive server: https://hal.science/hal-01088831v1
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    References listed on IDEAS

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    1. Haefke, Christian & Sonntag, Marcus & van Rens, Thijs, 2013. "Wage rigidity and job creation," Journal of Monetary Economics, Elsevier, vol. 60(8), pages 887-899.
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    3. Robert E. Hall & Paul R. Milgrom, 2008. "The Limited Influence of Unemployment on the Wage Bargain," American Economic Review, American Economic Association, vol. 98(4), pages 1653-1674, September.
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    10. Dale Mortensen & Eva Nagypal, 2007. "More on Unemployment and Vacancy Fluctuations," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(3), pages 327-347, July.
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    Cited by:

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    3. Martin, Christopher & Wang, Bingsong, 2020. "Search, shirking and labor market volatility," Journal of Macroeconomics, Elsevier, vol. 66(C).

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