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Equilibrium Directed Search with Multiple Application

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Abstract

We analyze a model of directed search in which unemployed job seekers observe all posted wages. We allow for the possibility of multiple applications by workers and ex post competition among vacancies. For any number of applications, there is a unique symmetric equilibrium in which vacancies post a common wage. When workers apply to only one vacancy, a single wage is paid and the resulting equilibrium is efficient. When workers make multiple applications, there is dispersion in wages paid, and equilibrium may be inefficient. We show that our results also hold in a steady-state version of the model.

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  • James Albrecht, Pieter Gautier, & Susan Vroman, 2003. "Equilibrium Directed Search with Multiple Application," Working Papers gueconwpa~03-03-02, Georgetown University, Department of Economics.
    • Handle: RePEc:geo:guwopa:gueconwpa~03-03-02
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    1. Fabien Postel-Vinay & Jean-Marc Robin, 2002. "The Distribution of Earnings in an Equilibrium Search Model with State-Dependent Offers and Counteroffers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 989-1016, November.
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    More about this item

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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