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Wage offers and on-the-job search

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Potter, Tristan and Bernhardt, Dan (2022) Wage offers and on-the-job search. Canadian Journal of Economics, 55 (1).

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Official URL: https://doi.org/10.1111/caje.12588

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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: Journal Article
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Divisions: Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH): Wages -- Mathematical models, Job security -- Psychological aspects, Job hunting, Employee retention
Journal or Publication Title: Canadian Journal of Economics
Publisher: Wiley-Blackwell Publishing, Inc.
ISSN: 0008-4085
Official Date: February 2022
Dates:
DateEvent
8 April 2022Available
February 2022Published
18 February 2021Accepted
Volume: 55
Number: 1
Status: Peer Reviewed
Publication Status: Published
Reuse Statement (publisher, data, author rights): "This is the peer reviewed version of the following article: Potter, T. and Bernhardt, D. (2022), Wage offers and on-the-job search. Canadian Journal of Economics/Revue canadienne d'économique. https://doi.org/10.1111/caje.12588, which has been published in final form at https://doi.org/10.1111/caje.12588. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions."
Access rights to Published version: Restricted or Subscription Access
Copyright Holders: Canadian Economics Association
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