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Search, Applications and Vacancies


  • Steven Stern



This paper examines a generalized rivalry problem in the labour market. It employs a simple labour supply model as a framework to analyse labour markets characterized by search with competition among searchers. First, the labour market process for new hires is described. The searching worker's opportunities are determined by the market parameter which is the probability that an application will not generate a job offer. The model is closed by determining the value of the market parameter given the search strategy that each worker individually follows. There exists a non-trivial eqUilibrium in steady state. At this equilibrium a social planner can improve each worker's welfare by inducing each worker to search less intensively.

Suggested Citation

  • Steven Stern, 1990. "Search, Applications and Vacancies," Virginia Economics Online Papers 398, University of Virginia, Department of Economics.
  • Handle: RePEc:vir:virpap:398

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    References listed on IDEAS

    1. Diamond, Peter A, 1981. "Mobility Costs, Frictional Unemployment, and Efficiency," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 798-812, August.
    2. Wilde, Louis L., 1977. "Labor market equilibrium under nonsequential search," Journal of Economic Theory, Elsevier, vol. 16(2), pages 373-393, December.
    3. Peter A. Diamond, 1982. "Wage Determination and Efficiency in Search Equilibrium," Review of Economic Studies, Oxford University Press, vol. 49(2), pages 217-227.
    4. Christopher A. Pissarides, 1985. "Taxes, Subsidies and Equilibrium Unemployment," Review of Economic Studies, Oxford University Press, vol. 52(1), pages 121-133.
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    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search


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