International Economic Review
University of Essex · Federal Reserve Bank of Atlanta · +5 more institutions
Abstract
This article 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.
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- References
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Authors
4- JSJob Searchwith Biddermemories
University of Essex, Federal Reserve Bank of Atlanta, University of Leicester, University of Konstanz, Tinbergen Institute, University of Rochester, University of Pennsylvania
- CCCarlos Carrillo‐Tudela
University of Essex, Federal Reserve Bank of Atlanta, University of Leicester, University of Konstanz, Tinbergen Institute, University of Rochester, University of Pennsylvania
- GMGuido MenzioCorresponding
University of Essex, Federal Reserve Bank of Atlanta, University of Leicester, University of Konstanz, Tinbergen Institute, University of Rochester, University of Pennsylvania
- ESEric Smith
University of Essex, Federal Reserve Bank of Atlanta, University of Leicester, University of Konstanz, Tinbergen Institute, University of Rochester, University of Pennsylvania
Topics & keywords
- Economics