Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2003-01-09 Revision-Date: 2004-02-14 Number: 03-004/3 Author-Name: James Albrecht Author-Email: firstname.lastname@example.org Author-Workplace-Name: Department of Economics, Georgetown University Author-Name: Pieter Gautier Author-Email: email@example.com Author-Workplace-Name: Faculty of Economics, Erasmus University Rotterdam Author-Name: Susan Vroman Author-Email: firstname.lastname@example.org Author-Workplace-Name: Department of Economics, Georgetown University Title: Equilibrium Directed Search with Multiple Applications Abstract: We analyse a model of equilibrium directed search in a large labour market. Each worker, observing the wages posted at all vacancies, makes a fixed, finite number of applications, a. We allow for the possibility of ex post competition should more than one vacancy want to hire the same worker. For each a, there is a unique symmetric equilibrium in which all vacancies post the same wage. When a= 1, the common posted wage lies between the competitive and monopsony levels, and equilibrium is efficient. When a > 1, all vacancies post the monopsony wage. Some workers fail to find a job, some find a job at the monopsony wage, and some—those for whom there is competition—get the competitive wage. Equilibrium is inefficient when a > 1; in particular, there is excessive vacancy creation.
See the publication in the Review of Economic Studies, 2006, 73(4) 869-91. Classification-JEL: J64; D83; J41. Keywords: directed search; matching; wage dispersion; efficiency. File-Url: http://papers.tinbergen.nl/03004.pdf File-Format: application/pdf File-Size: 320725 bytes Handle: RePEc:tin:wpaper:20030004