Abstract
AbstractWe study the wage‐setting problem of an employer with private information about demand for its product when workers can engage in costly on‐the‐job search. Employers understand that low wage offers may convey bad news that induces workers to search. The unique perfect sequential equilibrium wage strategy is characterized by: (i) pooling by intermediate‐revenue employers on a common wage that just deters search, (ii) discontinuously lower revealing offers by low‐revenue employers for whom the benefit of deterring search fails to warrant the required high pooling wage and (iii) high revealing offers by high‐revenue employers seeking to deter aggressive raiders.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Canadian Journal of Economics/Revue canadienne d'économique
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
