scholarly journals Cheap Talk Messages for Market Design: Theory and Evidence from a Labor Market with Directed Search

2021 ◽  
Author(s):  
John Horton ◽  
Ramesh Johari ◽  
Philipp Kircher
2019 ◽  
Vol 37 (3) ◽  
pp. 715-746 ◽  
Author(s):  
Stefano Banfi ◽  
Benjamín Villena-Roldán

2016 ◽  
Vol 8 (4) ◽  
pp. 1-15
Author(s):  
Matthew Levy ◽  
Balázs Szentes

This paper analyzes a labor market, where: workers can acquire an observable skill at no cost, firms differ in unobserved productivity, workers' skill and firms' productivity are substitutes, and firms' search is directed. The main result is that, if the entry cost of firms is small, no worker acquires the skill in the unique equilibrium. For intermediate entry costs, a positive measure of workers obtain the skill, and the number of skilled workers goes to one as entry costs become large. Welfare is highest when the entry cost is high. (JEL D21, D24, D82, D83, J24)


2021 ◽  
Author(s):  
Shanthi Manian ◽  
Ketki Sheth

A person’s success often depends on whether others believe what they say. Growing evidence suggests that people are less likely to believe statements made by women rather than men. We consider whether assertive cheap talk, an important and widely used tool for increasing credibility, is a mechanism for this gender gap. If women face negative returns to assertive cheap talk, then they have less access to an effective tool for increasing their credibility. We provide evidence using a laboratory experiment and an online replication, both with real stakes, in an advice-following setting. We study whether assertive cheap talk affects advice following, whether subjects discriminate based on advisor gender, and whether there are differential returns to assertive cheap talk by gender. Subjects were randomly assigned to an unseen male or female team leader who were otherwise identical and to different types of prescripted, increasingly assertive written communication from the leader. Assertive language significantly increased advice following, but we find no evidence for gender discrimination. We also find that assertive language had positive returns for both male and female leaders, despite subjects perceiving this language as more masculine. However, female subjects were still less likely to choose the self-promotional language. Thus, even in the absence of discrimination, this choice would reduce adherence to advice provided by women, generating a gender gap. Greater use of assertive language could be an effective strategy for women to increase their influence and credibility in the labor market. This paper was accepted by Yan Chen, decision analysis.


2019 ◽  
Vol 48 (4) ◽  
pp. 839-859 ◽  
Author(s):  
AXEL CRONERT

AbstractEmployment subsidy programs have experienced considerable expansion across Europe in recent decades. To date, most studies analyzing this policy shift have assumed that these programs are largely equivalent in terms of their designs, effects, and explanations. In contrast, this article argues that employment subsidies are best understood as versatile multi-purpose tools that can be used as means to rather different distributional ends. Using Multiple Correspondence Analysis to explore novel data from hundreds of employment subsidy programs across Europe, this article develops a new typology based on two overarching trade-offs. The typology highlights that employment subsidies may be designed to counteract as well as to sustain insider/outsider divides in the labor market, and that they may be designed to tackle either structural or cyclical labor market problems. In a first empirical evaluation of the typology, programs with different designs are found to vary systematically in terms of distributional outcomes and starting conditions.


2017 ◽  
Vol 35 (2) ◽  
pp. 202-216 ◽  
Author(s):  
Andrea Sharam ◽  
Lyndall Bryant

Purpose Digital disruption offers an innovative opportunity to address housing affordability issues through the use of market design theory and two-sided matching markets. The purpose of this paper is to scope a model for how “uberisation” can revolutionise the traditional apartment delivery model in Australia, leading to improved housing affordability. Design/methodology/approach This paper uses semi-structured interviews with operators of online real estate platforms and deliberative developers to examine how the principles of “uberisation”, that is two-sided matching markets, are driving innovation in the apartment supply process. Findings Findings confirm that real estate internet platforms and deliberative developers innovators are informed by the benefits of aggregating demand to reduce development risk, thus enabling apartments to be provided at a substantially lower price than by traditional methods. Research limitations/implications The number of interviews is small reflecting the limited number of market actors currently engaged in the innovations investigated. Originality/value This research is innovative as it introduces theoretical understandings gained from market design theory and applies those concepts to disrupt the apartment development process.


2012 ◽  
Vol 50 (4) ◽  
pp. 959-1006 ◽  
Author(s):  
Kevin Lang ◽  
Jee-Yeon K Lehmann

We review theories of race discrimination in the labor market. Taste-based models can generate wage and unemployment duration differentials when combined with either random or directed search even when strong prejudice is not widespread, but no existing model explains the unemployment rate differential. Models of statistical discrimination based on differential observability of productivity across races can explain the pattern and magnitudes of wage differentials but do not address employment and unemployment. At their current state of development, models of statistical discrimination based on rational stereotypes have little empirical content. It is plausible that models combining elements of the search models with statistical discrimination could fit the data. We suggest possible avenues to be pursued and comment briefly on the implication of existing theory for public policy. (JEL J15, J31, J64, J71)


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