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General Equilibrium with Real Time Search in Labor and Product Markets

Birger Wernerfelt
Journal of Political Economy
Vol. 96, No. 4 (Aug., 1988), pp. 821-831
Stable URL: http://www.jstor.org/stable/1830475
Page Count: 11
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
General Equilibrium with Real Time Search in Labor and Product Markets
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Abstract

The paper is concerned with economies in which agents find sellers and employers in a time-consuming search process while they simultaneously trade with their current partners. A symmetric steady-state equilibrium does not exist, but asymmetric steady-state equilibria exist and are such that larger firms offer higher wages and charge lower prices than smaller firms, but still make more profits. These profits can be seen as rents from a superior market position.

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