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Nash Bargaining, Credible Bargaining and Efficiency wages in a matching model for the US

Author

Listed:
  • Sophocles Mavroeidis

    (University of Oxford)

  • James Malcomson

    (University of Oxford)

Abstract

This paper incorporates Nash bargaining, credible bargaining and efficiency wages as special cases of an over-arching model of wage determination in a matching model that is used to assess econometrically how well each fits US data. With Nash bargaining, estimates for worker bargaining power and the value of non-work activity are almost identical to those calibrated by Hagedorn and Manovskii (AER 2008). However, the over-identifying restrictions are overwhelmingly rejected statistically, as they are for credible bargaining. Efficiency wages fit the data better, with the over-identifying restrictions not rejected statistically, and result in a lower, more plausible estimated value of non-work activity.

Suggested Citation

  • Sophocles Mavroeidis & James Malcomson, 2011. "Nash Bargaining, Credible Bargaining and Efficiency wages in a matching model for the US," 2011 Meeting Papers 776, Society for Economic Dynamics.
    • Handle: RePEc:red:sed011:776
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    References listed on IDEAS

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    3. Kfir Eliaz & Ran Spiegler, 2014. "Reference Dependence and Labor Market Fluctuations," NBER Macroeconomics Annual, University of Chicago Press, vol. 28(1), pages 159-200.

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    More about this item

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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