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Wage offers and on-the-job search

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Potter, Tristan and Bernhardt, Dan (2019) Wage offers and on-the-job search. Working Paper. Coventry: University of Warwick. Department of Economics. Warwick economics research papers series (WERPS) (1201). (Unpublished)

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Official URL: https://warwick.ac.uk/fac/soc/economics/research/w...

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Abstract

We study the wage-setting problem of an employer with private information about demand for its product when workers can engage in costly on-the-job search. Employers understand that low wage offers may convey bad news that induces workers to search. The unique perfect sequential equilibrium wage strategy is characterized by: (i) pooling by intermediate-revenue employers on a common wage that just deters search; (ii) discontinuously lower revealing offers by low-revenue employers for whom the benefit of deterring search fails to warrant the required high pooling wage; and (iii) high revealing offers by high-revenue employers seeking to deter aggressive raiders

Item Type: Working or Discussion Paper (Working Paper)
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH): Wages -- Econometric models, Job hunting -- Econometric models, Economics, Search theory, Job hunting -- Social aspects
Series Name: Warwick economics research papers series (WERPS)
Publisher: University of Warwick. Department of Economics
Place of Publication: Coventry
ISSN: 0083-7350
Official Date: June 2019
Dates:
DateEvent
June 2019Published
Number: 1201
Institution: University of Warwick
Status: Not Peer Reviewed
Publication Status: Unpublished
Access rights to Published version: Open Access (Creative Commons)

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