Job search with recall and reneging

Junjie Guo ()
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Junjie Guo: Department of Economics, University of Wisconsin-Madison

Theoretical Economics, Forthcoming

Abstract: This paper studies a model of job search with two novel decisions related to anti-competitive practices by firms and other parties in the labor market. First, instead of making an exploding offer requiring an immediate decision, a firm may allow a worker to recall its offer within a period of time. Second, after accepting an offer, a worker may renege on it before the job starts. The model suggests that the two decisions are related to each other, and a small cost of reneging is critical for the coexistence of exploding offers, recall, and reneging. Policies that discourage workers from reneging could induce firms to make more exploding offers with lower wages, contradicting other policies for exploding offers and reducing the value of job search for workers.

Keywords: Job search; recall; reneging; wages (search for similar items in EconPapers)
JEL-codes: C72 C73 C78 J31 J41 J64 (search for similar items in EconPapers)
Date: 2026-10-15
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