I study a model in which firms invest in capital and post wages, and heterogeneous workers, who have private … payoff from the match before wages are paid. Each of these payoffs displays complementarity in capital and skill. I derive … conditions under which the market exhibits PAM, positive assortative matching. Under these conditions, the firms over-invest in …

model of adverse selection and frictions in the directed (competitive) search theory. CE is defined to maximize the ex …

This paper presents a theory explaining the labor market matching process through microeconomic incentives. There are … quit decisions. This approach obviates the need for a matching function. On this theoretical basis, we argue that the … matching function is vulnerable to the Lucas critique. Our calibrated model for the U.S. economy can account for important …

This paper presents a theory explaining the labor market matching process through microeconomic incentives. There are … quit decisions. This approach obviates the need for a matching function. On this theoretical basis, we argue that the … matching function is vulnerable to the Lucas critique. Our calibrated model for the U.S. economy can account for important …

information. I consider a model with random matching and wage bargaining a la Pissarides (1985, 2000) where worker ability is …

information. I consider a model with random matching and wage bargaining a la Pissarides (1985, 2000) where worker ability is …