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Simultaneous Search with Heterogeneous Firms and Ex Post Competition

Author

Listed:
  • Gautier, Pieter A.

    (Vrije Universiteit Amsterdam)

  • Wolthoff, Ronald P.

    (University of Toronto)

Abstract

We study a search model where workers can send multiple applications to high and low productivity firms. Firms that compete for the same candidate can increase their wage offers as often as they like. We show that there is a unique equilibrium where workers mix between sending both applications to the high and both to the low productivity sector. Efficiency requires however that they apply to both sectors because then the coordination frictions are lowest. For many configurations, the equilibrium outcomes are the same under directed and random search. Allowing for free entry creates a second source of inefficiency.

Suggested Citation

  • Gautier, Pieter A. & Wolthoff, Ronald P., 2006. "Simultaneous Search with Heterogeneous Firms and Ex Post Competition," IZA Discussion Papers 2056, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2056
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    References listed on IDEAS

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    Cited by:

    1. Cai, Xiaoming & Gautier, Pieter A. & Wolthoff, Ronald P., 2017. "Search frictions, competing mechanisms and optimal market segmentation," Journal of Economic Theory, Elsevier, vol. 169(C), pages 453-473.
    2. Thérèse REBIÈRE & Frédéric GAVREL & Isabelle LEBON, 2009. "Formal Education Versus Learning-by-doing," EcoMod2009 21500078, EcoMod.
    3. Gautier, Pieter A. & Moraga-González, José L. & Wolthoff, Ronald P., 2016. "Search costs and efficiency: Do unemployed workers search enough?," European Economic Review, Elsevier, vol. 84(C), pages 123-139.
    4. Kaas Leo, 2010. "Variable Search Intensity with Coordination Unemployment," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-33, October.
    5. Serdar Birinci & Kurt See & Shu Lin Wee, 2020. "Job Applications and Labor Market Flows," Working Papers 2020-023, Federal Reserve Bank of St. Louis, revised Jan 2023.
    6. Gautier, Pieter A. & Wolthoff, Ronald P., 2009. "Simultaneous search with heterogeneous firms and ex post competition," Labour Economics, Elsevier, vol. 16(3), pages 311-319, June.
    7. Ronald Wolthoff & Pieter Gautier & Xiaoming Cai, 2016. "Inclusive versus Exclusive Markets:," 2016 Meeting Papers 262, Society for Economic Dynamics.
    8. Wolthoff, Ronald P., 2011. "It's About Time: Implications of the Period Length in an Equilibrium Job Search Model," IZA Discussion Papers 6002, Institute of Labor Economics (IZA).
    9. Gautier, Pieter & Holzner, Christian, 2011. "Simultaneous Search and Network Efficiency," CEPR Discussion Papers 8522, C.E.P.R. Discussion Papers.
    10. Xiaoming Cai & Pieter Gautier & Ronald Wolthoff, 2015. "Inclusive versus Exclusive Markets: Search Frictions and Competing Mechanisms," Working Papers tecipa-545, University of Toronto, Department of Economics.
    11. Ronald Wolthoff, 2018. "Applications and Interviews: Firms’ Recruiting Decisions in a Frictional Labour Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(2), pages 1314-1351.
    12. Gautier, Pieter A. & Moraga-González, José L. & Wolthoff, Ronald P., 2007. "Structural Estimation of Search Intensity: Do Non-Employed Workers Search Enough?," IZA Discussion Papers 3045, Institute of Labor Economics (IZA).
    13. Pieter Gautier & Jose Luis Moraga-Gonzalez & Ronald Wolthoff, 2007. "Structural Estimation of Search Intensity: Do non-employed workers search hard enough?," 2007 Meeting Papers 695, Society for Economic Dynamics.
    14. Kaas, Leo, 2008. "Variable Search Intensity in an Economy with Coordination Unemployment," IZA Discussion Papers 3697, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    efficiency; coordination frictions; directed search;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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