Publication Type
Journal Article
Version
acceptedVersion
Publication Date
5-2012
Abstract
We consider a directed search model with risk-averse workers and risk-neutral entrepreneurs who can set up firms that post wage-vacancy contracts, i.e., contracts where firms can make payments to more than one applicant, and where the payments can be different for each applicant and be contingent on the number of applicants. We establish that the type of contracts the literature focuses on are not offered if firms can post wage-vacancy contracts. We show that there exists an equilibrium satisfying a Monotonic Expected Utility property which is efficient. Furthermore, we investigate the role of wage-vacancy contracts on welfare and competition.
Keywords
Directed search, contracts, vacancies, risk sharing, competition
Discipline
Economic Theory | Entrepreneurial and Small Business Operations | Labor Economics
Research Areas
Applied Microeconomics
Publication
Journal of Economic Theory
Volume
147
Issue
3
First Page
1064
Last Page
1104
ISSN
0022-0531
Identifier
10.1016/j.jet.2012.01.014
Publisher
Elsevier
Citation
JACQUET, Nicolas L. and TAN, Serene.
Wage-vacancy contracts and coordination frictions. (2012). Journal of Economic Theory. 147, (3), 1064-1104.
Available at: https://ink.library.smu.edu.sg/soe_research/2003
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.jet.2012.01.014
Included in
Economic Theory Commons, Entrepreneurial and Small Business Operations Commons, Labor Economics Commons