Search and Knightian uncertainty

Kiyohiko G. Nishimura, Hiroyuki Ozaki

研究成果: Article査読

51 被引用数 (Scopus)

抄録

Suppose that "uncertainty" about labor market conditions has increased. Does this change induce an unemployed worker to search longer, or shorter? This paper shows that the answer is drastically different depending on whether an increase in "uncertainty" is an increase in risk or that in true uncertainty in the sense of Frank Knight. We show in a general framework that, while an increase in risk (the mean-preserving spread of the wage distribution that the worker thinks she faces) increases the reservation wage, an increase in Knightian uncertainty (a decrease in her confidence about the wage distribution) reduces it.

本文言語English
ページ(範囲)299-333
ページ数35
ジャーナルJournal of Economic Theory
119
2
DOI
出版ステータスPublished - 2004 12
外部発表はい

ASJC Scopus subject areas

  • 経済学、計量経済学

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