A rich but tractable variant of the Burdett-Mortensen model of wage setting behavior is formulated and a dynamic market equilibrium solution to the model is defined and characterized. In the model, firms cannot commit to wage contracts. Instead, the Markov perfect equilibrium to the wage setting...

A rich but tractable variant of the Burdett-Mortensen model of wage setting behavior is formulated and a dynamic market equilibrium solution to the model is defined and characterized. In the model, firms cannot commit to wage contracts. Instead, the Markov perfect equilibrium to the wage setting...

Microeconomic data on individual firms and employer-employee matches reveal substantial and persistent dispersion in firm size, productivity, and average wage paid and a positive correlation between each pair. To the extent that intrinsic differences in firm productivity explain these facts,...

As the children of immigrants, my parents were raised in Scandinavian Minnesota. My mother, Verna Ecklund, was a university student for only one year but my father, Thomas Peter Mortensen, graduated from the School of Forestry at the University of Minnesota in 1936. They were married shortly...

Dale T. Mortensen delivered his Prize Lecture on 8 December 2010 at Aula Magna, Stockholm University.

In the context of the canonical search and matching model with many worker firms, it is known that a unique single wage steady state equilibrium exists even when employer factor productivity differs. Contrary to this result, matched employer-employee data suggest both wage and productivity...

This paper considers a dynamic, non-steady state environment in which wage dispersion exists and evolves in response to shocks. Workers do not observe firm productivity and firms do not commit to future wages, but there is on-the-job search for higher paying jobs. The model allows for firm...