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Equilibrium Directed Search with Multiple Applications

31 Pages Posted: 13 Mar 2003  

James Albrecht

Georgetown University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Pieter A. Gautier

Free University of Amsterdam; Tinbergen Institute Amsterdam (TIA); IZA Institute of Labor Economics

Susan Vroman

Georgetown University; IZA Institute of Labor Economics

Date Written: February 2003

Abstract

We analyze a model of directed search in which unemployed job seekers observe all posted wages. We allow for the possibility of multiple applications by workers and ex post competition among vacancies. For any number of applications, there is a unique symmetric equilibrium in which vacancies post a common wage. When workers apply to only one vacancy, a single wage is paid and the resulting equilibrium is efficient. When workers make multiple applications, there is dispersion in wages paid, and equilibrium may be inefficient. We show that our results also hold in a steady-state version of the model.

Keywords: Job Search, Directed Search, Matching

JEL Classification: J64, D83, J41

Suggested Citation

Albrecht, James and Gautier, Pieter A. and Vroman, Susan, Equilibrium Directed Search with Multiple Applications (February 2003). IZA Discussion Paper No. 719. Available at SSRN: https://ssrn.com/abstract=385182

James W. Albrecht (Contact Author)

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States
202-687-6105 (Phone)
202-687-6102 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

IZA Institute of Labor Economics

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

Pieter A. Gautier

Free University of Amsterdam ( email )

Amsterdam, ND North Holland
Netherlands

Tinbergen Institute Amsterdam (TIA) ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

IZA Institute of Labor Economics

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

Susan B. Vroman

Georgetown University ( email )

Washington, DC 20057
United States
202-687-6024 (Phone)
202-687-6102 (Fax)

IZA Institute of Labor Economics

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

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