Homogenous Agent Wage-Posting Model with Wage Dispersion

Matej Steinbacher, Matjaz Steinbacher, Mitja Steinbacher
2009 Social Science Research Network  
In the paper we test a homogenous agent version of the Montgomery's (1991) non-cooperative wage posting model. The inclusion of intrinsic costs, related to the uncertainty when changing the alternative agents are already using, alters the outcome of the model in two respects: firstly, it significantly prolongs the convergence-time to the equilibrium, and, more importantly, it may lead to the wage dispersion, irrespective of equally-productive-agent proposition, something not present in the model of Montgomery.
doi:10.2139/ssrn.1430910 fatcat:u4qqxeo3vvgvxlfjgmeth77mv4