Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70729
Authors: 
Carrillo-Tudela, Carlos
Menzio, Guido
Smith, Eric
Year of Publication: 
2009
Series/Report no.: 
Working Paper, Federal Reserve Bank of Atlanta 2009-28
Abstract: 
This paper revisits the no-recall assumption in job search models with take-it-or-leave-it offers. Workers who can recall previously encountered potential employers in order to engage them in Bertrand bidding have a distinct advantage over workers without such attachments. Firms account for this difference when hiring a worker. When a worker first meets a firm, the firm offers the worker a sufficient share of the match rents to avoid a bidding war in the future. The pair share the gains to trade. In this case, the Diamond paradox no longer holds.
Subjects: 
job search
recall
wage determination
Diamond paradox
JEL: 
J24
J42
J64
Document Type: 
Working Paper

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