camerer/ss280/jovanonicjpe79.pdf · there is spurious correlation between job tenure (length) and...
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Peter Bossaerts
There is spurious correlation between job tenure (length) and separation probabilities - he corrects for that!
Peter Bossaerts
Two sided: mp differs for employer AND employee
Peter Bossaerts
Model of EXPERIENCE, not inspection (in latter case, signaling/screening could be used)
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Peter Bossaerts
Workers are homogeneous - only luck determines the outcomes?! CANNOT explain correlation of tenure over time
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Peter Bossaerts
There are NO involuntary layoffs. Firms always make zero profits. They do NOT have to scale down.
Peter Bossaerts
Now he introduces heterogeneity: some workers quit earlier because it's less costly.
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Peter Bossaerts
This is the BS equation.
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Peter Bossaerts
This is optimal exercise of perpetual put options
Peter Bossaerts
Pretty crude approximation!
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Peter Bossaerts
First passage time...
Peter Bossaerts
In economy as a whole, wages grow.
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