Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/49511
Authors: 
Gautier, Pieter A.
Holzner, Christian
Year of Publication: 
2011
Series/Report no.: 
CESifo working paper: Labour Markets 3522
Abstract: 
When workers send applications to vacancies they create a network. Frictions arise if workers do not know where other workers apply to (this affects network creation) and firms do not know which candidates other firms consider (this affects network clearing). We show that those frictions and the wage mechanism are in general not independent. Equilibria that exhibit wage dispersion is inefficient in terms of network formation. Under complete recall (firms can go back and forth between all their candidates) only wage mechanisms that allow for ex post Bertrand competition generate the maximum matching on a realized network.
Subjects: 
efficiency
network clearing
random bipartite network formation
simultaneous search
JEL: 
D83
D85
E24
J64
Document Type: 
Working Paper

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