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- W1603239442 abstract "This paper studies firms f job creation decisions in a labor market with search frictions. A simple labor market search model is developed in which a firm can search for a second employee while producing with a first worker. A firm expands employment even if the instantaneous payoff to a large firm is less than that of staying small--a firm has a precautionary motive to expand its size. In addition, this motive is enhanced by a greater market tightness. Because of this effect, firms f decisions become interdependent--a firm creates a vacancy if it expects other firms to do the same, creating strategic complementarity among firms and thereby self-fulfilling multiple equilibria." @default.
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- W1603239442 date "2007-10-01" @default.
- W1603239442 modified "2023-09-23" @default.
- W1603239442 title "Precautionary Demand for Labor in Search Equilibrium" @default.
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