Multiple Applications, Competing Mechanisms, and Market Power

Pieter Gautier, James Albrecht, Xiaoming Cai and Susan Vroman

No 13912, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We consider a labor market with search frictions in which workers make multiple applications and firms can post and commit to general mechanisms that may be conditioned both on the number of applications received and on the number of offers received by its candidate. When the contract space includes application fees, there exists a continuum of equilibria of which only one is socially efficient. In the inefficient equilibria, firms have market power that arises from the fact that the value of a worker's application portfolio depends on what other firms offer, which allows individual firms to free ride and offer workers less than their marginal contribution. Finally, by allowing for general mechanisms, we are able to examine the sources of inefficiency in the multiple applications literature.

Keywords: Multiple applications; Directed search; Competing mechanisms; Efficiency; market power (search for similar items in EconPapers)
JEL-codes: C78 D44 D83 (search for similar items in EconPapers)
Date: 2019-08
New Economics Papers: this item is included in nep-com, nep-cta, nep-des, nep-dge, nep-lab, nep-mic and nep-ore
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Multiple applications, competing mechanisms, and market power (2020)
Working Paper: Multiple Applications, Competing Mechanisms, and Market Power (2019)
Working Paper: Multiple Applications, Competing Mechanisms, and Market Power (2019)
Working Paper: Multiple Applications, Competing Mechanisms, and Market Power (2019)
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