A new model of equilibrium involuntary unemployment

Kaas, Leo; Madden, Paul

A new model of equilibrium involuntary unemployment

Dateien

14.pdfGröße: 178.9 KBDownloads: 456

Datum

2004

Autor:innen

Kaas, Leo

Madden, Paul

Open Access-Veröffentlichung

Open Access Green

Sammlungen

Wirtschaftswissenschaften

Publikationstyp

Zeitschriftenartikel

Publikationsstatus

Published

Erschienen in

Economic Theory. 2004, 23(3), pp. 507-527. Available under: doi: 10.1007/s00199-003-0391-2

Zusammenfassung

We show that equilibrium involuntary unemployment emerges in a multi-stage game model where all market power resides with firms, on both the labour and the output market. Firms decide wages, employment, output and prices, and under constant returns there exists a continuum of subgame perfect Nash equilibria involving unemployment and positive profits. A firm does not undercut the equilibrium wage since then high wage firms would attract its workers, thus forcing the undercutting firm out of both markets. Full employment equilibria are payoff dominated by unemployment equilibria, and the arguments are robust to decreasing returns.

Fachgebiet (DDC)

330 Wirtschaft

Schlagwörter

Involuntary unemployment, Multi-stage game, Imperfect competition

Zitieren

ISO 690

KAAS, Leo, Paul MADDEN, 2004. A new model of equilibrium involuntary unemployment. In: Economic Theory. 2004, 23(3), pp. 507-527. Available under: doi: 10.1007/s00199-003-0391-2

BibTex

@article{Kaas2004model-11822,
  year={2004},
  doi={10.1007/s00199-003-0391-2},
  title={A new model of equilibrium involuntary unemployment},
  number={3},
  volume={23},
  journal={Economic Theory},
  pages={507--527},
  author={Kaas, Leo and Madden, Paul}
}

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Universitätsbibliographie

Ja