Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87571
Authors: 
Gautier, Pieter A.
Holzner, Christian L.
Year of Publication: 
2011
Series/Report no.: 
Tinbergen Institute Discussion Paper 11-092/3
Abstract: 
When workers send applications to vacancies they create a network. Frictionsarise because workers typically do not know where other workers apply to and firmsdo not know which candidates other firms consider. The first coordination frictionaffects network formation, while the second coordination friction affects networkclearing. We show that those frictions and the wage mechanism are in general notindependent. The wage mechanism determines both the distribution of networksthat can arise and the number of matches on a given network. Equilibria that exhibitwage dispersion are inefficient in terms of network formation. Under complete recall(firms can go back and forth between all their candidates) only wage mechanismsthat allow for ex post Bertrand competition generate the maximum matching on arealized network.
Subjects: 
Efficiency
network clearing
random bipartite network formation
simultaneous
JEL: 
D83
D85
E24
J64
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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