Incentives in Competitive Search Equilibrium and Wage Rigidity

Espen R. Moen and Asa Rosen

No 5554, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper examines competitive search equilibrium when workers' effort choice and 'type' are private information. We derive a modified Hosios Rule determining the allocation of resources, and analyze how private information influences the responsiveness of the unemployment rate to changes in macroeconomic variables. Most importantly, private information increases the responsiveness of the unemployment rate to changes in the general (type- and effort independent) productivity level. If the changes also affect the information structure, the responsiveness of the unemployment rate may be large, even if the changes in expected productivity are small.

Keywords: private information; search; unemployment; wage rigidity (search for similar items in EconPapers)
JEL-codes: E30 J30 J60 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Date: 2006-03
View list of references View citations in EconPapers

Downloads: (external link)
http://www.cepr.org/pubs/dps/DP5554.asp (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:cpr:ceprdp:5554

Ordering information: This working paper can be ordered from
http://www.cepr.org/pubs/dps/DP5554.asp

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers
Address: Centre for Economic Policy Research, 53--56 Great Sutton Street, London EC1V 0DG
Series data maintained by ().