We consider a model where firms open vacancies and post and commit to a wage mechanism. Search is costly and workers simultaneously apply to multiple jobs. Firms can be connected to multiple workers and workers to multiple firms. We use a new method to derive the expected maximum number of matches in a large market as a function of the number of applications and market tightness. We also derive the conditions under which firm entry, worker participation, and search intensity are socially efficient. Finally, we show that a sequential auction under incomplete information can establish the social optimum and discuss some alternative mechanisms that can, under complete information of the entire network, also deliver social efficiency.
"Simultaneous Search and Efficiency of Entry and Search Intensity."
American Economic Journal: Microeconomics,
Consumer Economics: Empirical Analysis
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Wage Level and Structure; Wage Differentials
Unemployment: Models, Duration, Incidence, and Job Search
Personnel Economics: Firm Employment Decisions; Promotions