Digitized by the Internet Archive in 2011 with Funding from Orking Paper Department of Economics Efficient Wage Dispersion

Abstract

In market economies, identical workers receive very different wages, violating the Walrasian 'law of one price'. We argue that in the absence of a Walrasian auctioneer to coordinate trade, wage dispersion among identical workers is an equilibrium phenomenon. Moreover, wage dispersion is necessary for an economy to function efficiently. In the absence of… (More)

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Cite this paper

@inproceedings{Acemoglu2011DigitizedBT, title={Digitized by the Internet Archive in 2011 with Funding from Orking Paper Department of Economics Efficient Wage Dispersion}, author={Daron Acemoglu and Robert Shimer}, year={2011} }