Working Paper No. 160

The Wage Policy of a Firm when Recruitment is a Wage Dependent Poisson Process and Wages are Downward Rigid


The paper contains an analysis of a firm's optimal wage and recruitment policy, when the dynamic labor supply to the firm is specified as a Poisson distributed flow of job-applicants, whose reservation wages are distributed in a fairly general way. Provided that the firm is not allowed to lower its wage level over time, it has recently been shown by the author that the optimal policy is to establish a constant wage level over future employment states. The paper explores the further properties of the optimal wage and its response to changes in the parameters of the decision problem.

Interdisciplinary European Studies

The European Union and the Return of the Nation State

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

About the book

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