Multiple applications, competing mechanisms, and market power / James Albrecht (Georgetown University and IZA), Xiaoming Cai (Tongji University), Pieter Gautier (Vrije Universiteit Amsterdam, Tinbergen Institute and IZA), Susan Vroman (Georgetown University and IZA)
VerfasserAlbrecht, James W. ; Cai, Xiaoming ; Gautier, Pieter ; Vroman, Susan B.
KörperschaftForschungsinstitut zur Zukunft der Arbeit
ErschienenBonn, Germany : IZA Institute of Labor Economics, July 2019
Elektronische Ressource
Umfang1 Online-Ressource (36 Seiten) : Diagramme
SerieDiscussion paper ; no. 12512
 Das Dokument ist öffentlich zugänglich im Rahmen des deutschen Urheberrechts.
Multiple applications, competing mechanisms, and market power [0.54 mb]
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We consider a labor market with search frictions in which workers make multiple applications and firms can post and commit to general mechanisms that may be conditioned both on the number of applications received and on the number of offers received by its candidate. When the contract space includes application fees, there exists a continuum of equilibria of which only one is socially efficient. In the inefficient equilibria, firms have market power that arises from the fact that the value of a workers application portfolio depends on what other firms offer, which allows individual firms to free ride and offer workers less than their marginal contribution. Finally, by allowing for general mechanisms, we are able to examine the sources of inefficiency in the multiple applications literature.