A continuous-time job search model: general renewal processes

Abstract

In this paper we study a continuous time job search model introduced by Zuckerman in [11]: Job offers are received randomly over time according to a (general) renewal process. The offer wages are assumed to be independent and identically distributed random variables. The objective of the «job searcher» is to choose a stopping time which maximizes his expected net return. The main contribution of this paper is that we give a unified approach to solve the job searcher's problem for general interarrival time distributions (in a finite and an infinite horizon setting). In general, an optimal strategy does not necessarly stop at a time at which a job is offered. Further, we give various examples of what the optimal strategy looks like in specific submodels. The results obtained by Zuckerman in [11], [12] and [13] follow immediately from the results presented here