Download this Paper Open PDF in Browser

Job Search with Bidder Memories

27 Pages Posted: 24 Aug 2009  

Carlos Carrillo-Tudela

University of Leicester; IZA Institute of Labor Economics

Eric Smith

University of Essex - Department of Economics

Guido Menzio

University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: July 1, 2009

Abstract

This paper revisits the no-recall assumption in job search models with take-it-or-leave-it offers. Workers who can recall previously encountered potential employers in order to engage them in Bertrand bidding have a distinct advantage over workers without such attachments. Firms account for this difference when hiring a worker. When a worker first meets a firm, the firm offers the worker a sufficient share of the match rents to avoid a bidding war in the future. The pair share the gains to trade. In this case, the Diamond paradox no longer holds.

Keywords: Job search, recall, wage determination, Diamond paradox

JEL Classification: J24, J42, J64

Suggested Citation

Carrillo-Tudela, Carlos and Smith, Eric and Menzio, Guido, Job Search with Bidder Memories (July 1, 2009). PIER Working Paper No. 09-027. Available at SSRN: https://ssrn.com/abstract=1460746 or http://dx.doi.org/10.2139/ssrn.1460746

Carlos Carrillo-Tudela

University of Leicester ( email )

University Road
Leicester, LE1 7RH
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Eric Smith

University of Essex - Department of Economics ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Guido Menzio (Contact Author)

University of Pennsylvania - Department of Economics ( email )

160 McNeil Building
3718 Locust Walk
Philadelphia, PA 19104
United States
215-898-5170 (Phone)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Paper statistics

Downloads
16
Abstract Views
496