A Theory of Partially Directed Search

Guido Menzio

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: This paper studies a search model of the labor market where firms have private information about the quality of their vacancies, they can costlessly communicate with unemployed workers before the beginning of the application process, but the content of the communication does not constitute a contractual obligation. At the end of the application process, wages are determined as the outcome of an alternating offer bargaining game. The model is used to show that vague non-contractual announcements about compensation - such as those one is likely to find in help-wanted ads - can be correlated with actual wages and can partially direct the search strategy of workers.

Keywords: Random search; directed search; non-cooperative bargaining; Coase conjecture; cheap-talk games (search for similar items in EconPapers)
JEL-codes: D8 E24 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2007-09-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (104)

Downloads: (external link)
https://economics.sas.upenn.edu/sites/default/file ... ng-papers/09-006.pdf (application/pdf)

Related works:
Journal Article: A Theory of Partially Directed Search (2007)
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:pen:papers:09-006

Access Statistics for this paper

More papers in PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania 133 South 36th Street, Philadelphia, PA 19104. Contact information at EDIRC.
Bibliographic data for series maintained by Administrator (pier@econ.upenn.edu).