Department of Economics and Business Economics

Competing Auctions of Skills

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We generalize McAfee’s (1993) game of competing sellers to the case of heterogeneous sellers. In the generalized McAfee (GM) game, the equilibrium expected job offer distribution of each worker (seller) type evolves over time as a function of stochastic events. We derive a tractable method of solving the GM game. We estimate, using non-parametric methods, a close fit between a benchmark GM game and a cross-section of Danish data on productivity and unemployment. The theoretical properties of the GM game, which relate to on-the-job search, assortative matching, aggregate and match specific shocks, and the equivalence of alternative games, are also characterized.
Original languageEnglish
Place of publicationAarhus
PublisherInstitut for Økonomi, Aarhus Universitet
Number of pages54
Publication statusPublished - 5 Jan 2016
SeriesEconomics Working Papers
Number2016-02

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