Search and knightian uncertainty

• 成果类型: Article
• 署名作者: Nishimura, KG; Ozaki, H
• 署名单位: Tohoku University; University of Tokyo
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2003.04.001
• 发表日期: 2004
• 页码: 299-333
• 关键词: Knightian uncertainty; RISK; search; reservation wage

摘要

Suppose that uncertainty about labor market conditions has increased. Does this change induce an unemployed worker to search longer, or shorter? This paper shows that the answer is drastically different depending on whether an increase in uncertainty is an increase in risk or that in true uncertainty in the sense of Frank Knight. We show in a general framework that, while an increase in risk (the mean-preserving spread of the wage distribution that the worker thinks she faces) increases the reservation wage, an increase in Knightian uncertainty (a decrease in her confidence about the wage distribution) reduces it. (C) 2004 Elsevier Inc. All rights reserved.