A theory of production, matching, and distribution
Sephorah Mangin ()
Journal of Economic Theory, 2017, vol. 172, issue C, 376-409
This paper develops a search-theoretic model of the labor market in which heterogeneous firms compete directly to hire unemployed workers. This process of direct competition simultaneously determines both the expected match output and workers' effective bargaining power. The framework delivers a unified aggregate production and matching technology, and firms are paid both productivity rents and matching rents. Both the curvature of the endogenous production technology and the distribution of output between workers and firms are influenced by properties of the underlying firm productivity distribution, particularly the tail index (a measure of tail fatness). For example, if the firm productivity distribution is Pareto, the labor share is decreasing in its tail index if the value of matching rents is not too high.
Keywords: Competing auctions; Directed search; Competitive search; Aggregate production function; Factor shares; Labor share; Bargaining power (search for similar items in EconPapers)
JEL-codes: E23 E24 E25 J64 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: A Theory of Production, Matching, and Distribution (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:172:y:2017:i:c:p:376-409
Access Statistics for this article
Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell
More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Haili He ().