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ADVERSE SELECTION, LEARNING, AND COMPETITIVE SEARCH

Mayr‐Dorn, Karin

International economic review (Philadelphia), 2023-02, Vol.64 (1), p.129-153 [Periódico revisado por pares]

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Título:
ADVERSE SELECTION, LEARNING, AND COMPETITIVE SEARCH
Autor: Mayr‐Dorn, Karin
Assuntos: Economic theory ; Learning contracts ; Minimum wage ; Probation ; Probation period ; Probation service ; Productivity ; Regulation ; Workers
É parte de: International economic review (Philadelphia), 2023-02, Vol.64 (1), p.129-153
Descrição: I develop a model that allows for an analysis of the effects of time on adverse selection in the presence of search frictions. I find that, as a firm takes longer to adjust a worker's contract in response to learning about his type, inefficient overwork during the time before wage adjustment (probation) decreases. This provides a rationale for an optimal (minimum) probation period of about one month in the baseline scenario. Optimal probation duration varies with the degree of search frictions, the cost of effort, the relative productivity of different types of workers, and minimum wage regulations.
Editor: Philadelphia: Blackwell Publishing Ltd
Idioma: Inglês

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