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Can Job Competition Prevent Hold-Ups?

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dc.creator Jansen, Marcel
dc.date 2004
dc.date.accessioned 2013-10-16T07:09:24Z
dc.date.available 2013-10-16T07:09:24Z
dc.date.issued 2013-10-16
dc.identifier http://hdl.handle.net/10419/20223
dc.identifier ppn:37814717X
dc.identifier.uri http://koha.mediu.edu.my:8181/xmlui/handle/10419/20223
dc.description We consider an economy in which firms need to invest in capital before they can advertise a job, while applicants may have to compete for jobs. Our aim is to investigate how this competition affects the investment decisions of firms. Our first result shows that the economy always generates the right number of jobs. However, with random search firms under-invest in capital due to a hold-up problem. In contrast, if workers can direct their search to firms with different capital levels, the equilibrium is efficient. This result contrasts sharply with the predictions of models with ex post bargaining that never yield an efficient allocation. Moreover, our results extend the efficiency of auction mechanisms to an environment with non-contractible investments.
dc.language eng
dc.relation IZA Discussion paper series 988
dc.rights http://www.econstor.eu/dspace/Nutzungsbedingungen
dc.subject C78
dc.subject D83
dc.subject D44
dc.subject ddc:330
dc.subject hold-up
dc.subject search
dc.subject efficiency
dc.subject auctions
dc.subject Arbeitsnachfrage
dc.subject Investition
dc.subject Sunk Costs
dc.subject Arbeitsuche
dc.subject Wettbewerb
dc.subject Auktionstheorie
dc.subject Theorie
dc.subject hold-up
dc.title Can Job Competition Prevent Hold-Ups?
dc.type doc-type:workingPaper

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