Equilibrium Wage Dispersion: An Example

Search models with posting and match-specific heterogeneity generate wage dispersion. Given K values for the match-specific variable, it is known that there are K reservation wages that could be posted, but generically never more than two actually are posted in equilibrium. What is unknown is when we get two wages, and which wages are actually posted. For an example with K = 3, we show equilibrium is unique; may have one wage or two; and when there are two, the equilibrium can display any combination of posted reservation wages, depending on parameters. We also show how wages, profits, and unemployment depend on productivitySearch equilibrium, wage posting, wage dispersion, labor theory

Generalized search-theoretic models of monetary exchange

This paper extends the literature on search-theoretic models of money in several ways. It provides results for general bargaining parameters, whereas previous papers consider only special cases. It also presents one version of the model in which agents holding money cannot produce and another in which they can. The former has been used in essentially all the previous literature, although the latter seems more natural for some purposes and avoids several undesirable implications. Since very little is known about this version, the authors analyze it in detail.Monetary theory

Alternative Theories of Wage Dispersion

We analyze labor market models where the law of one price does not hold; i.e., models with equilibrium wage dispersion. We begin assuming workers are ex ante heterogeneous, and highlight a flaw with this approach: if search is costly, the market shuts down. We then assume workers are homogeneous but matches are ex post heterogeneous. This model is robust to search costs, and delivers equilibria equilibrium wage dispersion. However, we prove the law of two prices holds: generically we cannot get more than two wages. We explore several other models, including one combining ex ante and ex post heterogeneity; this model is robust, and can deliver more than two-point wage distributions.wages, search, distributions

Infalling Faint [OII] Emitters in Abell 851. I. Spectroscopic Confirmation of Narrowband-Selected Objects

We report on a spectroscopic confirmation of narrowband-selected [OII] emitters in Abell 851 catalogued by Martin et al. (2000). The optical spectra obtained from the Keck I Low Resolution Imaging Spectrometer (LRIS) and Keck II Deep Imaging Multi-Object Spectrograph (DEIMOS) have confirmed [OII]3727 emission in narrowband-selected cluster [OII] candidates at a 85% success rate for faint (i <~ 25) blue (g-i < 1) galaxies. The rate for the successful detection of [OII] emission is a strong function of galaxy color, generally proving the efficacy of narrowband [OII] search supplemented with broadband colors in selecting faint cluster galaxies with recent star formation. Balmer decrement-derived reddening measurements show a high degree of reddening [E(B-V) >~ 0.5] in a significant fraction of this population. Even after correcting for dust extinction, the [OII]/Ha line flux ratio for the high-E(B-V) galaxies remains generally lower by a factor of ~2 than the mean [OII]/Ha ratios reported by the studies of nearby galaxies. The strength of [OII] equivalent width shows a negative trend with galaxy luminosity while the Ha equivalent width does not appear to depend as strongly on luminosity. This in part is due to the high amount of reddening observed in luminous galaxies. Furthermore, emission line ratio diagnostics show that AGN-like galaxies are abundant in the high luminosity end of the cluster [OII]-emitting sample, with only moderately strong [OII] equivalent widths, consistent with a scenario of galaxy evolution connecting AGNs and suppression of star-forming activity in massive galaxies.Comment: 11 pages (LaTeX emulateapj), 8 figures, to appear in ApJ. A version with high resolution figures available from the lead autho

The search-theoretic approach to monetary economics: a primer

The authors present simple versions of models used in the search-theoretic approach to monetary economics. They discuss results on the existence of monetary equilibria, the potential for multiple equilibria, and welfare. Using bilateral bargaining theory, they consider models where prices are fixed as well as those where prices are determined endogenously. After describing the frictions necessary to construct a model where money has an essential role, they conclude by reviewing many extensions and applications in the related literatureMoney