Recent research documents mounting evidence for sizable and persistent biases in individual labor market expectations. This paper incorporates subjective expectations into a general equilibrium labor market model and studies the implications of biased expectations for wage bargaining, vacancy...

Recent research documents mounting evidence for sizable and persistent biases in individual labor market expectations. This paper incorporates subjective expectations into a general equilibrium labor market model and analytically studies the implications of biased expectations for wage...

This paper contributes to the analysis of central vs. decentral (firm-level) labour market negotiations. We argue that during negotiations on a central scale employers and employees plausibly take output market effects into account, while they behave competitively during firm-level negotiations....

This paper contributes to the analysis of central vs. decentral (firm-level) labour market negotiations. We argue that during negotiations on a central scale employers and employees plausibly take output market effects into account, while they behave competitively during firm-level negotiations....

We analyse the two-dimensional Nash bargaining solution (NBS) deploying a standard labour market negotiations model (McDonald and Solow, 1981). We show that the two-dimensional bargaining problem can be decomposed into two one-dimensional problems such that the two solutions together replicate...