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Job Search with Bidder Memories

Carlos Carrillo-Tudela (), Guido Menzio () and Eric Smith ()

No 4319, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper revisits the no-recall assumption in job search models with take-it-or-leave-it offers. Workers who can recall previously encountered potential employers in order to engage them in Bertrand bidding have a distinct advantage over workers without such attachments. Firms account for this difference when hiring a worker. When a worker first meets a firm, the firm offers the worker a sufficient share of the match rents to avoid a bidding war in the future. The pair share the gains to trade. In this case, the Diamond paradox no longer holds.

Keywords: wage determination; recall; job search; Diamond paradox (search for similar items in EconPapers)
JEL-codes: J24 J42 J64 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2009-07
New Economics Papers: this item is included in nep-bec, nep-dge and nep-lab
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Citations: View citations in EconPapers (1) Track citations by RSS feed

Published in: International Economic Review, 2011, 52 (3), 639 - 655

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Journal Article: JOB SEARCH WITH BIDDER MEMORIES (2011) Downloads
Working Paper: Job search with bidder memories (2009) Downloads
Working Paper: Job Search with Bidder Memories (2009) Downloads
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