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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/20524| Title: | Strategic Wage Setting and Coordination Frictions with Multiple Applications |
| Keywords: | J64 J41 D4 ddc:330 coordination frictions internet job search minimum wage wage dispersion Lohnbildung Lohnverhandlungen Nash-Gleichgewicht Lohnverhandlungstheorie Arbeitsuche Theorie |
| Issue Date: | 16-Oct-2013 |
| Description: | We examine wage competition in a model where identical workers choose the number of jobs to apply for and identical firms simultaneously post a wage. The Nash equilibrium of this game exhibits the following properties: (i) an equilibrium where workers apply for just one job exhibits unemployment and absence of wage dispersion; (ii) an equilibrium where workers apply for two or for more (but not for all) jobs always exhibits wage dispersion and, typically, unemployment; (iii) the equilibrium wage distribution with a higher vacancy-to-unemployment ratio first-order stochastically dominates the wage distribution with a lower level of labor market tightness; (iv) the average wage is non-monotonic in the number of applications; (v) the equilibrium number of applications is non-monotonic in the vacancy-to-unemployment ratio; (vi) a minimum wage increase can be welfare improving because it compresses the wage distribution and reduces the congestion effects caused by the socially excessive number of applications; and (vii) the only way to obtain efficiency is to impose a mandatory wage that eliminates wage dispersion altogether. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/20524 |
| Other Identifiers: | http://hdl.handle.net/10419/20524 ppn:395918529 |
| Appears in Collections: | EconStor |
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