Hertweck, Matthias S.; Lewis, Vivien; Villa, Stefania - 2019
We introduce two types of effort into an otherwise standard labor search model to examine indeterminacy and sunspot … contributes to self-fulfilling profit expectations, raising the likelihood of indeterminacy. Variable search effort makes workers … search more intensively in a tighter labor market, which alleviates congestion and reduces the likelihood of indeterminacy …