This study develops models in which workers form expectations of average wages in choosing levels of effort and on-the-job search. It is assumed that information on lagged average wages is available at a low fixed cost, whilst acquiring other information requires an additional variable cost....

This study derives a reduced-form equation for the aggregate supply curve from a model in which firms pay efficiency wages and workers have imperfect information about average wages at other firms. If specific assumptions are made about workers’ expectations of average wages and about...

This paper addresses the question of how to adequately model empirical variation in willingness to pay (WTP) for a public good and demonstrates the importance of appropriate modelling of heterogeneity for policy and decision making on public good provision. Even if on average voters are to gain...