General Equilibrium with Real Time Search in Labor and Product Market s

Birger Wernerfelt

Journal of Political Economy, 1988, vol. 96, issue 4, 821-31

Abstract: This paper is concerned with economies in which agents find sellers and employers in a time-consuming search process while they simultaneously trade with their current partners. A symmetric steady-state equilibrium does not exist, but asymmetric steady-state equilibria exist and are such that larger firms offer higher wages and charge lower prices than smaller firms, but still make more profits. These profits can be seen as rents from a superior market position. Copyright 1988 by University of Chicago Press.

Date: 1988
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