Nash Bargaining, Credible Bargaining and Efficiency Wages in a Matching Model for the US.

Working paper

This paper incorporates Nash bargaining, credible bargaining and efficiency wages as special cases of an over-arching model of wage determination in a matching model that is used to assess econometrically how well each fits US data. With Nash bargaining, estimates for worker bargaining power and the value of non-work activity are almost identical to those calibrated by Hagedorn and Manovskii (2008). However, the over-identifying restrictions are overwhelmingly rejected statistically, as they are for credible bargaining. Efficiency wages fit the data better, with the over-identifying restrictions not rejected statistically, and result in a lower, more plausible estimated value of non-work activity.

Authors: Malcomson, J; Mavroeidis, S

• Publisher: Department of Economics (University of Oxford)
• Series: Discussion paper series
• Publication date: 2010-01-01
• Language: English