Search frictions impede the labor market. Despite this indisputable fact, it is a priori unclear how job search costs affect search duration and unemployment: lower search costs make it easier to find a job, reducing search duration and unemployment, but may also increase the reservation wage,...

This paper shows that a search and matching model with idiosyncratic training cost shocks can explain the asymmetric movement of the job-finding rate over the business cycle and the decline of matching efficiency in recessions. Large negative aggregate shocks move the hiring cutoff into a part...

We study the effect of diminishing search frictions in markets with adverse selection by presenting a model in which agents with private information can simultaneously contact multiple trading partners. We highlight a new trade-off: facilitating contacts reduces coordination frictions but also...

This paper examines a labor law reform implemented in Portugal in 2009 which restricted the use of fixed-term contracts to reduce labor market segmentation. The reform targeted establishments created by large firms above a specific size threshold, covering about 15% of total employment. Drawing...

Using a unique data set and a novel identification strategy, we estimate the effect of minimum wage increases on job vacancy postings. Utilizing occupation-specific countylevel vacancy data from the Conference Board's Help Wanted Online for 2005-2018, we find that state-level minimum wage...

We study an optimal liquidation problem with multiplicative price impact in which the trend of the asset's price is an unobservable Bernoulli random variable. The investor aims at selling over an infinite time-horizon a fixed amount of assets in order to maximize a net expected profit...

This paper examines the role of intermediation for the efficiency of Decentralized Finance (DeFi) markets for startups, with an application to Initial Coin Offerings (ICOs). ICO intermediation is a contentious issue. Existing research fails to explain the trade-off between intermediated and...

We revisit the hypothesis that cyclical fluctuations in unemployment are caused by shocks to the discount rate. We use a rich search-theoretic model of the labor market in which the UE, EU and EE rates are all endogenous. Analytically, we show that an increase in the discount rate lowers the UE...

This paper develops a framework for analyzing unemployment in terms of variations in the nt.imber and distribution of people becoming unemployed and inindividual probabilities of leaving unemployment. Contrary to the emphasis on exit probabilities in the recent macroeconomics literature, we...

Humans are increasingly interacting in and operating their daily lives through structured digital and virtual environments, mainly through apps that provide media for sharing photos, messaging, gaming, collaborating, or video watching. Most of these digital environments are offered under...

The management and marketing literature has found that consumers generally expect high quality sellers to post high prices. We show that low quality firms can exploit this in search markets to generate a low-price perception. This price perception can lead to low quality firms dominating search...

This paper studies a labor search model with agents who are averse to ambiguity (Knightian uncertainty). Shocks to confidence about future productivity are modeled as changes in ambiguity. Using the Survey of Professional Forecasters data, I find that confidence shocks help explain the equity...

We study the interaction of search and application approval in credit markets. We combine a unique dataset, which details search behavior for a large sample of mortgage borrowers, with loan application and rejection decisions. Our data reveal substantial dispersion in mortgage rates and search...

Using the classical sequential search framework by Anderson and Renault (1999), this paper lets consumers search partially and shows that (1) consumers optimally search products at a partial depth when search cost is large, and (2) due to partial depth, firms’ prices and consumer surplus are...

Using the classical sequential search framework by Anderson and Renault (1999), this paper lets consumers search partially and shows that (1) consumers optimally search products at a partial depth when search cost is large, and (2) due to partial depth, firms’ prices and consumer surplus are...

How do market opportunities influence the formation and development of long-term relationships? To answer this question, I build a model of employment relationships where the worker has private information about match quality, the firm learns about match quality over time, and the firm makes a...

Using computational methods, Atolia, Gibson, and Marquis (2018) (AGM) show that the Hagedorn and Manovskii's (2008) (HM) calibration strategy fails to solve the Shimer puzzle in a fully specified Real Business Cycle (RBC) search model. A fully specified RBC search model refers to a...

In a labor market where new jobs cannot start until some time in the future, firms post vacancies in advance when productivity is high, and they post more vacancies but lower wages as the job starting time gets closer. An equilibrium wage distribution with both a continuous component and a mass...

We propose a model of sequential spatial search with learning. There is a mapping from a space of technologies (or products) to qualities that is unknown to the searcher. The searcher can learn various points on this mapping through costly experimentation. She cares both about the technology...

We extend the classic Balassa-Samuelson model to an environment with search unemployment. We show that the classic Balassa-Samuelson model with the assumption of full employment emerges as a special case of our more generalized model. In our generalized model, the degree of labor market...

We consider games in which players search for a hidden prize, and they have asymmetric information about the prize’s location. We study the social payoff in equilibria of these games. We present sufficient conditions for the existence of an equilibrium that yields the first-best payoff (i.e.,...

How do consumers respond to "From" prices advertised by firms that differ from the actual purchase price to be paid? While a low “From” price is likely to draw consumers in, a high one is likely to be closer to the true price thus reflecting a more accurate estimate. It is not clear how the...

In intermediated markets, trading takes time and intermediaries extract rents. We estimate a structural search-and-bargaining model to quantify these trading delays, intermediaries’ ability to extract rents, and the resulting welfare losses in government and corporate bond markets. Using...

I develop a model of firm-to-firm search and matching to show that the impact of falling trade costs on firm sourcing decisions and consumer welfare depends on the relative size of search externalities in domestic and international markets. These externalities can be positive if firms share...

In this paper we explore efficiency and optimal policy in decentralized transportation markets that suffer from search frictions, such as taxicabs, trucks and bulk shipping. We illustrate the impact of two externalities: the well-known thin/thick market externalities and what we call pooling...

The job finding rate of Unemployment Insurance (UI) recipients declines in the initial months of unemployment and then exhibits a spike at the benefit exhaustion point. A range of theoretical explanations have been proposed, but those are hard to disentangle using data on job finding alone. To...

Can digital labour market platforms reduce search frictions in formal or informal labour markets? We study this question using a randomized experiment embedded in a tracer study of the work transitions of graduates from technical and vocational colleges in Mozambique. We implement an...

Job seekers face substantial information frictions, especially in international labor markets where intermediaries match prospective migrants with overseas employers. We conducted a randomized trial in Indonesia to explore how information about intermediary quality shapes migration outcomes....