The Limited Influence of Unemployment on the Wage Bargain

@article{Hall2005TheLI,
  title={The Limited Influence of Unemployment on the Wage Bargain},
  author={Robert Ernest Hall and Paul R. Milgrom},
  journal={NBER Working Paper Series},
  year={2005}
}
When a job-seeker and an employer meet, find a prospective surplus, and bargain over the wage, conditions in the outside labor market, including especially unemployment, may be irrelevant. The job-seeker's threat point in the bargain is to delay bargaining, not to terminate bargaining and resume search at other employers. Similarly, the employer's threat point is to delay bargaining, not to terminate it. Consequently, the outcome of the bargain depends on the relative costs of delay to the… 

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