The McCall Search Model

Set up An agent decides whether to delay her employment later (keep searching) or take the job (settle). An agent’s action is binary (keep searching or take the job). If she takes the job, she will get constant wage indefinitely. If she rejects the job, she receives unemployment compensation c and reconsider her choice next period. The probability of observing wage offer is uniformly distributed. There are n states of wages with equal probability....

May 12, 2023 · 3 min · 486 words · Me