Price Rigidity and Wage Rigidity: Market Failure or Market Efficiency

Wage Rigidity and Labor Market Dynamics with Sorting ∗

This paper adds two-sided ex ante heterogeneity and a production technology inducing sorting to the canonical Diamond-Mortensen-Pissarides (DMP) search and matching model. This modification considerably improves the model’s empirical performance. Due to assortative matching, match-specific wages are non-monotonous in firm type, as illustrated by Eeckhout and Kircher (2011); that is, an optimal,...

Price Rigidity and Market Power in German Retailing

Price Points and Price Rigidity

We study the link between price points and price rigidity, using two datasets: weekly scanner data, and Internet data. We find that (i) “9” is the most frequently used price-ending for the penny, dime, dollar and ten-dollar digits, (ii) the most common price changes are those that keep the price endings at these “9” digits, (iii) the 9-ending prices are less likely to change in comparison to no...

Reciprocity and downward wage rigidity

The employment relationship is to a large extent characterized by incomplete contracts, in which workers have a considerable degree of discretion over the choice of their work effort. This discretion at work kicks in the potential importance of ‘‘gift exchange” or reciprocity between workers and employers in their employment relationship. Built on the seminal work of Akerlof (1980), this paper ...

Fairness, Reciprocity, and Wage Rigidity

Fairness, Reciprocity, and Wage Rigidity This paper contains a review of empirical work related to wage rigidity, where researchers have collected their own data. The work includes field studies, economic experiments, and psychological surveys. Economists have done the field studies and experiments, and management scientists and experimental psychologists have done the surveys. There is a remar...