Double-Holdups in a Matching Model with Search Frictions and Endogenous Heterogeneity

Lucas Navarro

No 181, Econometric Society 2004 Latin American Meetings from Econometric Society

Abstract: This paper investigates the interaction between education decisions by workers and investment decisions by firms in a random matching model with endogenous heterogeneity. I analyze the efficiency properties of the equilibrium and find that in the presence of search frictions and investment costs in both human and physical capital, while workers under-invest in education firms may efficiently invest in high-skill jobs. I find that due to a technological externality, under-investments by workers alleviate the holdup problem faced by firms. Moreover, I show that there is a combination of human and physical capital costs that solves the firms' holdup problem

Keywords: matching; search frictions; ex-post bargaining; endogenous heterogeneity; efficiency (search for similar items in EconPapers)
JEL-codes: C78 J41 J64 (search for similar items in EconPapers)
Date: 2004-08-11
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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: https://EconPapers.repec.org/RePEc:ecm:latm04:181

Access Statistics for this paper

More papers in Econometric Society 2004 Latin American Meetings from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F. Baum ().