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Wage Inequality in a Frictional Labor Market

Shapiro, Joel - Barcelona Graduate School of Economics (Barcelona GSE) - 2003

Wage inequality in the United States has grown substantially in the past two decades. Standard supply-demand analysis in the empirics of inequality (e.g. Katz and Murphy (1992)) indicates that we may attribute some of this trend to an outward shift in the demand for high skilled labor. In this...

Persistent link: https://www.econbiz.de/10010547287

Quotient Spaces of Boundedly Rational Types

Cianciaruso, Davide; Germano, Fabrizio - Barcelona Graduate School of Economics (Barcelona GSE) - 2011

By identifying types whose low-order beliefs up to level ℓ<sub>i</sub> about the state of nature coincide, we obtain quotient type spaces that are typically smaller than the original ones, preserve basic topological properties, and allow standard equilibrium analysis even under bounded reasoning. Our...

Persistent link: https://www.econbiz.de/10011019697

Approximate Knowledge of Rationality and Correlated Equilibria

Germano, Fabrizio; Zuazo-Garin, Peio - Barcelona Graduate School of Economics (Barcelona GSE) - 2012

We extend Aumann's theorem [Aumann 1987], deriving correlated equilibria as a consequence of common priors and common knowledge of rationality, by explicitly allowing for non-rational behavior. We replace the assumption of common knowledge of rationality with a substantially weaker one, joint...

Persistent link: https://www.econbiz.de/10010851330

Endogenous Depth of Reasoning

Alaoui, Larbi; Penta, Antonio - Barcelona Graduate School of Economics (Barcelona GSE) - 2014

We introduce a model of strategic thinking in games of initial response. Unlike standard level-k models, in this framework the player's `depth of reasoning' is endogenously determined, and it can be disentangled from his beliefs over his opponent's cognitive bound. In our approach, individuals...

Persistent link: https://www.econbiz.de/10010851323

The value of useless information

Alaoui, Larbi - Barcelona Graduate School of Economics (Barcelona GSE) - 2012

There are many situations in which individuals have a choice of whether or not to observe eventual outcomes. In these instances, individuals often prefer to remain ignorant. These contexts are outside the scope of analysis of the standard von Neumann-Morgenstern (vNM) expected utility model,...

Persistent link: https://www.econbiz.de/10010547096

Aversion to Inequality and Segregating Equilibria

Cabrales, Antonio; Calvó-Armengol, Antoni - Barcelona Graduate School of Economics (Barcelona GSE) - 2005

This paper shows that models where preferences of individuals depend not only on their allocations, but also on the well-being of other persons, can produce both large and testable effects. We study the allocation of workers with heterogeneous productivities to firms. We show that even small...

Persistent link: https://www.econbiz.de/10010547201

Search and Matching in the Labor Market without Unemployment Insurance

Obiols-Homs, Francesc - Barcelona Graduate School of Economics (Barcelona GSE) - 2012

We study the effect of market incompleteness in a search model of the labor market in which the distribution of … idiosyncratic uncertainty is determined endogenously. We show that costly search introduces a wealth effect at low levels of wealth … choose not to search. The effect of the market arrangement remains dramatically large. …

Persistent link: https://www.econbiz.de/10011152453

A Positive Theory of Geographic Mobility and Social Insurance

Hassler, John; Mora, José Vicente Rodríguez - Barcelona Graduate School of Economics (Barcelona GSE) - 2003

Evidence suggests that unemployed individuals sometimes can affect their job prospects by undertaking a costly action like deciding to move or retrain. Realistically, such an opportunity arises only for some individuals and the identity of those is unobservable. Unemployment insurance should...

Persistent link: https://www.econbiz.de/10010547525

Rhetoric and Analogies

Aragonès, Enriqueta; Gilboa, Itzhak; Postlewaite, Andrew; … - Barcelona Graduate School of Economics (Barcelona GSE) - 2013

The art of rhetoric may be defined as changing other people’s minds (opinions, beliefs) without providing them new information. One technique heavily used by rhetoric employs analogies. Using analogies, one may draw the listener’s attention to similarities between cases and to re-organize...

Persistent link: https://www.econbiz.de/10010851430

Not Just Like Starting Over: Leadership and Revivification of Cooperation in Groups

Brandts, Jordi; Rott, Christina; Solà, Carles - Barcelona Graduate School of Economics (Barcelona GSE) - 2015

We conduct a laboratory experiment to study how, after a history of decay, cooperation in a repeated voluntary contribution game can be revived in an enduring way. Simply starting the repeated game over - a simple fresh start - leads to an initial increase of cooperation, but to a subsequent new...

Persistent link: https://www.econbiz.de/10011261233