Does bargaining matter in the small firm's matching Mmodel?

Olivier L'Haridon, Franck Malherbet and Sebastien Perez-Duarte

No 938, HEC Research Papers Series from HEC Paris

Abstract: In this article, the authors use a stylized model of the labor market to investigate the effects of three alternative and well-known bargaining solutions. They apply the Nash, the Egalitarian and the Kalai-Smorodinsky bargaining solutions in the small firm’s matching model of unemployment. To the best of their knowledge, this is the first attempt that has been made to implement and systematically compare these solutions in search matching economies. Their results are twofold. First from the theoretical/methodological viewpoint, they extend a somewhat flexible search matching economy to alternative bargaining solutions. In particular, they prove that the Egalitarian and the Kalai -Smorodinsky solutions are easily implementable and mathematically tractable within search-matching economies. Second, their results show that even though the traditional results of bargaining theory apply in this context, they are generally qualitatively different and quantitatively weaker than expected. This is of particular relevance in comparison with the results established in the earlier literature.

Keywords: Search and matching models; Bargaining theory; Nash; Egalitarian; Kalai-Smorodinsky (search for similar items in EconPapers)
JEL-codes: C71 C78 J20 J60 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2010-09-07
New Economics Papers: this item is included in nep-dge, nep-gth and nep-lab
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Related works:
Journal Article: Does bargaining matter in the small firms matching model? (2013)
Working Paper: Does bargaining matter in the small firms matching model? (2013)
Working Paper: Does bargaining matter in the small firm's matching model? (2011)
Working Paper: Does Bargaining Matter in the Small Firm’s Matching Model? (2011)
Working Paper: Does Bargaining Matter in the Small Firm's Matching Model? (2010)
Working Paper: Does Bargaining Matter in the Small Firm Matching Model? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:0938

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