Search equilibrium with unobservable investment

• 成果类型: Article
• 署名作者: Rao, Neel
• 署名单位: State University of New York (SUNY) System; University at Buffalo, SUNY
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2022.03.011
• 发表日期: 2022
• 页码: 300-330
• 关键词: equilibrium search; Unobservable investment; Diamond paradox; holdup problem; wage dispersion; human capital

摘要

This article studies a wage posting game in which workers invest in human capital so as to reduce the disutility of labor. If investment were observable, then no workers would invest in skills due to the holdup problem, and all employers would offer the monopsony wage as in the Diamond paradox. With unobservable investment, however, the equilibrium wage and skill distributions are nondegenerate, despite agents being ex ante identical. An asymptotic efficiency result is obtained in which investment converges to the efficient level as the arrival rate of job offers tends to infinity, with firms receiving all the surplus in the market. The model generates distinctive comparative statics predictions, and the theory can rationalize any wage distribution that satisfies a few regularity conditions. The analysis is robust to the inclusion of some forms of direct search costs. (c) 2022 Elsevier Inc. All rights reserved.