Discussion Paper Details

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Title: Reference Dependence and Labor-Market Fluctuations

Author(s): Kfir Eliaz and Ran Spiegler

Publication Date: May 2012

Keyword(s): Negative-Reciprocity, Reference-Dependence, Search and Matching, Shimer Puzzle, Social Preferences and Wage Rigidity

Programme Area(s): Labour Economics

Abstract: We incorporate reference-dependent preferences into a search-and-matching model of the labor market, in which firms have all the bargaining power and productivity follows an AR(1) process. Motivated by Akerlof (1982) and Bewley (1999), we assume that existing workers are willing to exert unobserved,

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Bibliographic Reference

Eliaz, K and Spiegler, R. 2012. 'Reference Dependence and Labor-Market Fluctuations'. London, Centre for Economic Policy Research.