Homogenous Agent Wage-Posting Model with Wage Dispersion
7 Pages Posted: 9 Jul 2009
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: Suggested Citation
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