Equilibrium Directed Search with Multiple Applications

Albrecht, James; Gautier, Pieter A.; Vroman, Susan

doi:10.1111/j.1467-937x.2006.00400.x

Cited by 183 publications

(227 citation statements)

References 10 publications

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“…See Roth (2008) for a recent overview. 11 In a technical appendix to their paper, Albrecht et al (2006) briefly discuss what happens if firms can contact a second applicant (I = 2).…”

Section: Figure 1: Related Literaturementioning

confidence: 99%

“…A → ∞ and I = 1. Albrecht et al (2006) and Galenianos & Kircher (2009) also impose I = 1, but study the case in which workers send multiple applications simultaneously, i.e. A > 1.…”

Section: Figure 1: Related Literaturementioning

confidence: 99%

“…7 Albrecht et al (2004Albrecht et al ( , 2006 discuss both frictions in a theoretical setting, but call them the 'urn-ball friction' and the 'multiple-application friction' respectively. See also Gautier & Moraga-González (2005). cost of an application is really low, workers will decide to apply a lot and the search friction will be limited.…”

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confidence: 99%

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Applications and Interviews: A Structural Analysis of Two-Sided Simultaneous Search

Wolthoff

2012

SSRN Journal

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Most of the literature analyzing equilibrium effects of labor market policies assumes bilateral meetings between workers and firms. This ignores the frictions that arise when workers and firms meet in a multilateral way and cannot coordinate their application and hiring decisions. I analyze the magnitude of these frictions. For this purpose, I present an equilibrium search model of the labor market with an endogenous number of contacts between workers and firms. Firms post a wage and a recruitment technology that determines how many applicants they will interview. After observing these contracts, workers decide to which firms to apply. Sending more applications and interviewing more applicants are both costly activities but increase the probability to match. In equilibrium, contract dispersion arises endogenously and workers spread their applications over the different types of contracts. Estimation of the model on the Employment Opportunities Pilot Projects data set provides values for the cost of an application and the cost of an interview. These estimates are used to determine the output loss compared to a Walrasian world. Frictions on the worker and the firm side reduce output by approximately 1% each. There is a potential role for activating labor market policies, because I show that for the estimated parameter values welfare can be improved if unemployed workers increase their search intensity.

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“…See Roth (2008) for a recent overview. 11 In a technical appendix to their paper, Albrecht et al (2006) briefly discuss what happens if firms can contact a second applicant (I = 2).…”

Section: Figure 1: Related Literaturementioning

confidence: 99%

“…A → ∞ and I = 1. Albrecht et al (2006) and Galenianos & Kircher (2009) also impose I = 1, but study the case in which workers send multiple applications simultaneously, i.e. A > 1.…”

Section: Figure 1: Related Literaturementioning

confidence: 99%

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Applications and Interviews: A Structural Analysis of Two-Sided Simultaneous Search

Wolthoff

2012

SSRN Journal

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“…In contrast, the screening was typically done for this position, the employer would respond based on a screening strategy for an applicant pool usually generated via formal methods. 6 This is also the case in the model of Albrecht et al (2006). full sample will contain many employers who raised their wage offer at some point(s) during the recruitment campaign.…”

Section: Basic Empirical Observationsmentioning

confidence: 99%

The labor market effects of employer recruitment choice

DeVaro

2008

European Economic Review

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Abstract[Excerpt] I analyze employer recruitment decisions using a dynamic, discrete-choice structural model that I estimate on a sample of clerical workers from the MCSUI, a large cross section of establishments in 4 metropolitan areas of the U.S. In the model, employers choose either informal recruitment methods (which generate a small but select applicant pool from which the employer can hire quickly) or formal methods (which create a large but less select applicant pool which the employer must screen intensively, delaying hiring times). I study the effects of 3 counterfactual simulations on recruitment strategies, starting wages, and vacancy durations: a wage subsidy, a policy designed to improve information about prospective matches, and an increase in the heterogeneity of prospective matches. I show that the effects of exogenous policy or environmental changes can be decomposed into "pure wage effects" that affect the wage offers employers post, holding constant their recruitment strategies, and "recruitment-wage effects" that involve changes in recruitment methods. The results show that changes in recruitment strategies represent an important channel through which changes in the economic environment affect the starting wages and vacancy duration for new hires. Abstract I analyze employer recruitment decisions using a dynamic, discrete-choice structural model that I estimate on a sample of clerical workers from the MCSUI, a large cross section of establishments in 4 metropolitan areas of the U.S. In the model, employers choose either informal recruitment methods (which generate a small but select applicant pool from which the employer can hire quickly) or formal methods (which create a large but less select applicant pool which the employer must screen intensively, delaying hiring times). I study the effects of 3 counterfactual simulations on recruitment strategies, starting wages, and vacancy durations: a wage subsidy, a policy designed to improve information about prospective matches, and an increase in the heterogeneity of prospective matches. I show that the effects of exogenous policy or environmental changes can be decomposed into "pure wage effects" that affect the wage offers employers post, holding constant their recruitment strategies, and "recruitment-wage effects" that involve changes in recruitment methods. The results show that changes in recruitment strategies represent an important channel through which changes in the economic environment affect the starting wages and vacancy duration for new hires.JEL Classification: M51

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“…However, by this logic, invariance is also likely to be an important property of the meeting technology in models of directed search in which buyers can attempt to meet multiple sellers, as in Albrecht et al (2006) and Galenianos & Kircher (2009). In these models, ex post heterogeneity arises because some buyers have received two price quotes and others have received only one; a seller's trading probability is thus 1 − P 0 (λ, γ), where γ is the fraction of buyers that don't trade with a different seller.…”

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confidence: 99%

Meeting Technologies and Optimal Trading Mechanisms in Competitive Search Markets

2014

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In a market in which sellers compete by posting mechanisms, we study how the properties of the meeting technology affect the mechanism that sellers select. In general, sellers have incentive to use mechanisms that are socially efficient. In our environment, sellers achieve this by posting an auction with a reserve price equal to their own valuation, along with a transfer that is paid by (or to) all buyers with whom the seller meets. However, we define a novel condition on meeting technologies, which we call "invariance," and show that the transfer is equal to zero if and only if the meeting technology satisfies this condition.JEL classification: C78, D44, D83.

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Equilibrium Directed Search with Multiple Applications

Cited by 183 publications

References 10 publications

Applications and Interviews: A Structural Analysis of Two-Sided Simultaneous Search

Applications and Interviews: A Structural Analysis of Two-Sided Simultaneous Search

The labor market effects of employer recruitment choice

Meeting Technologies and Optimal Trading Mechanisms in Competitive Search Markets

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