Information and rationality asymmetries in a simple high-low search wage model
Reyniers, D. J.
(1992).
Information and rationality asymmetries in a simple high-low search wage model.
Economics Letters,
38(4), 479-486.
https://doi.org/10.1016/0165-1765(92)90037-Y
(1992).
Information and rationality asymmetries in a simple high-low search wage model.
Economics Letters,
38(4), 479-486.
https://doi.org/10.1016/0165-1765(92)90037-Y
A simple model of wage bargaining is developed. The firm knows the worker's productivity but the worker has only probabilistic information about his value to the firm. The worker acquires information by making wage demands and observing the resulting hiring/firing decisions of the firm. The firm acts strategically and distorts the worker's learning process.