Nash Bargaining, Credible Bargaining and Efficiency Wages in a Matching Model for the US

James Malcomson and Sophocles Mavroeidis

No 511, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: This paper incorporates Nash bargaining, credible bargaining and efficiency wages as special cases of an over-arching model of wage determination in a matching model that is used to assess econometrically how well each fits US data. With Nash bargaining, estimates for worker bargaining power and the value of non-work activity are almost identical to those calibrated by Hagedorn and Manovskii (2008). However, the over-identifying restrictions are overwhelmingly rejected statistically, as they are for credible bargaining. Efficiency wages fit the data better, with the over-identifying restrictions not rejected statistically, and result in a lower, more plausible estimated value of non-work activity.

Keywords: Matching frictions; wage bargaining; efficiency wages; unemployment; shirking (search for similar items in EconPapers)
JEL-codes: E2 J3 J6 (search for similar items in EconPapers)
Date: 2010-11-01
New Economics Papers: this item is included in nep-dge and nep-mac
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Citations: View citations in EconPapers (6)

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Working Paper: Nash Bargaining, Credible Bargaining and Efficiency wages in a matching model for the US (2011)
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