An asymmetric job auction model

Xiaoting Wang

Abstract


In this paper we investigate a labor market with search frictions. Workers with heterogeneous productivity apply to different types of job vacancies by bidding the optimal profits that they can offer the firms. In the steady state equilibrium, the most capable workers separate themselves by only bidding at jobs requiring high skills, while applicants in the middle of the productivity distribution pool with the low-productivity workers and apply for jobs requiring low skills.


Keywords


Heterogeneity; Job auction; Steady state equilibrium.

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References


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DOI: http://dx.doi.org/10.18533/jefs.v3i05.167

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