This paper studies price dispersion in the Norwegian retail market for 766 products across 4 297 stores over 60 months. Price dispersion for homogeneous products is significant and persistent, with a coefficient of variation of 37% for the median product. Price dispersion differs between product...

We consider a frictional labor market in which firms want to insure their senior employees against income fluctuations and, at the same time, want to recruit new employees to fill their vacant positions. Firms can commit to a wage schedule, i.e. a schedule that specifies the wage paid by the...

This paper proposes a labor market model with job search frictions where workers have private information on match quality and effort. Firms use wage contracts to motivate workers. In addition, wages are also used to attract employees. We define and characterize competitive search equilibrium in...

This paper analyzes the interaction between wage contracts with deferred compensation and worker turnover. While deferred compensation improves the workers' incentives to exert effort, it distorts turnover decisions. We show that deferred compensation is less attractive when overall turnover in...

This paper examines the competitive search equilibrium when the workers' effort choice and type are private information. We derive a modified Hosios rule determining the allocation of resources and analyze how private information influences the responsiveness of the unemployment rate to changes...

In this paper, I construct an equilibrium for markets with frictions, which is competitive in the sense that all agents are price takers and maximize utility subject to a set of market parameters. I show that the equilibrium can be achieved if employers with vacancies can advertise publicly the...

In an important paper, Aghion and Bolton (1987) argue that a buyer and a seller may agree on high liquidation damages in order to extract rents from future suppliers. As this may distort future trade, it may be socially wasteful. We argue that Aghion and Bolton's analysis is incomplete in some...

We analyse the efficiency of the labour market outcome in a competitive search equilibrium model with endogenous turnover and endogenous general human capital formation. We show that search frictions do not distort training decisions if firms and their employees are able to coordinate...