Title: Wage Determination and Efficiency in Search Equilibrium
Abstract: Using a simple search technology and the Nash bargaining solution, the paper derives the steady state equilibrium negotiated wage as a function of the equilibrium unemployment and vacancy rates. For this wage, the lifetime expected present discounted value of earnings of a new worker is compared with the social marginal product of a new worker. These are not generally equal implying inefficient incentives for labour mobility.
Publication Year: 1982
Publication Date: 1982-04-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 810
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