@techreport{Gautier2004Strategic,
abstract = {We examine wage competition in a model where identical workers choose the number of jobs
to apply for and identical firms simultaneously post a wage. The Nash equilibrium of this
game exhibits the following properties: (i) an equilibrium where workers apply for just one job
exhibits unemployment and absence of wage dispersion; (ii) an equilibrium where workers
apply for two or for more (but not for all) jobs always exhibits wage dispersion and, typically,
unemployment; (iii) the equilibrium wage distribution with a higher vacancy-to-unemployment
ratio first-order stochastically dominates the wage distribution with a lower level of labor
market tightness; (iv) the average wage is non-monotonic in the number of applications; (v)
the equilibrium number of applications is non-monotonic in the vacancy-to-unemployment
ratio; (vi) a minimum wage increase can be welfare improving because it compresses the
wage distribution and reduces the congestion effects caused by the socially excessive
number of applications; and (vii) the only way to obtain efficiency is to impose a mandatory
wage that eliminates wage dispersion altogether.},
author = {Pieter A. Gautier and Jos\'{e} Luis Moraga-Gonz\'{a}lez},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {J64; J41; D4; 330; coordination frictions; internet; job search; minimum wage; wage dispersion; Lohnbildung; Lohnverhandlungen; Nash-Gleichgewicht; Lohnverhandlungstheorie; Arbeitsuche; Theorie},
language = {eng},
number = {1260},
title = {Strategic Wage Setting and Coordination Frictions with Multiple Applications},
type = {IZA Discussion paper series},
url = {http://hdl.handle.net/10419/20524},
year = {2004}
}
