Homogenous Agent Wage-Posting Model with Wage Dispersion

7 Pages Posted: 9 Jul 2009

See all articles by Matej Steinbacher

Matej Steinbacher

Free Society Institute

Matjaz Steinbacher

Kiel Institute for the World Economy; University of Donja Gorica

Mitja Steinbacher

Fakulteta za poslovne vede

Date Written: July 7, 2009

Abstract

In the paper we test a homogenous agent version of the Montgomery's (1991) non-cooperative wage posting model. The inclusion of intrinsic costs, related to the uncertainty when changing the alternative agents are already using, alters the outcome of the model in two respects: firstly, it significantly prolongs the convergence-time to the equilibrium, and, more importantly, it may lead to the wage dispersion, irrespective of equally-productive-agent proposition, something not present in the model of Montgomery.

Keywords: Job-search model, wage posting, wage dispersion, numerical optimization

JEL Classification: C72, C73, C15, D83, J31

Suggested Citation

Steinbacher, Matej and Steinbacher, Matjaz and Steinbacher, Mitja, Homogenous Agent Wage-Posting Model with Wage Dispersion (July 7, 2009). Available at SSRN: https://ssrn.com/abstract=1430910 or http://dx.doi.org/10.2139/ssrn.1430910

Matej Steinbacher

Free Society Institute ( email )

Prvomajska ulica 7
Slovenska Bistrica
Slovenia

Matjaz Steinbacher (Contact Author)

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, Schleswig-Hosltein D-24100
Germany

University of Donja Gorica ( email )

Podgorica, 81000
Montenegro

Mitja Steinbacher

Fakulteta za poslovne vede ( email )

Ciril Metodov Trg 9
Ljubljana, 1000
Slovenia
38631703057 (Phone)

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