Bargaining Solutions and Public Policies in Matching Models

Sylvain Baumann (), Samir Amine and Pedro Lages dos Santos
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Sylvain Baumann: EDEHN - Equipe d'Economie Le Havre Normandie - ULH - Université Le Havre Normandie - NU - Normandie Université

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Abstract: The aim of this paper is to show that usually the literature under or overestimate the effect of public policies on the labor market by using systematically a symmetric Nash bargaining solution to share the surplus between worker and firm. Indeed, using a matching model framework, we compare and analyze Nash, Egalitarian, Kalai-Smorodinsky and Equal-Sacrifice solutions. We show that the effects of public policies, as minimum wage or unemployment benefits, would be more or less significative depending on the bargaining solution. It appears that Nash and egalitarian solutions are less inclined to study the impacts of the introduction of the minimum wage.

Date: 2018
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Published in Economic Studies journal = Ikonomicheski Izsledvania, 2018

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02971764

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