Inefficient Unemployment Dynamics under Asymmetric Information

• Published in: The Journal of political economy Vol. 116; no. 4; pp. 667 - 708
• Main Author: Guerrieri, Veronica
• Format: Journal Article
• Language: English
• Published: Chicago The University of Chicago Press 01.08.2008; University of Chicago, acting through its Press
• Subjects: Asymmetric information; Competition; Economic commitments; Economic competition; Economic theory; Efficiency; Employment; Hiring; Information asymmetry; Job creation; Job hunting; Job search; Labor economics; Labour economics; Political economy; Search theory; Studies; Unemployment; Unemployment levels; Unemployment rates; Wages

I explore the efficiency properties of a competitive search model with match‐specific private information and limited commitment on the workers’ side. In a static setting the competitive search equilibrium is constrained efficient, whereas in a dynamic setting it is constrained inefficient whenever...