Wage offers and on-the-job search

Tristan Potter, Dan Bernhardt

Research output: Contribution to journalArticlepeer-review


We study the wage-setting problem of an employer with private information about demand for its product when workers can engage in costly on-the-job search. Employers understand that low wage offers may convey bad news that induces workers to search. The unique perfect sequential equilibrium wage strategy is characterized by: (i) pooling by intermediate-revenue employers on a common wage that just deters search, (ii) discontinuously lower revealing offers by low-revenue employers for whom the benefit of deterring search fails to warrant the required high pooling wage and (iii) high revealing offers by high-revenue employers seeking to deter aggressive raiders.

Original languageEnglish (US)
Pages (from-to)74-105
Number of pages32
JournalCanadian Journal of Economics
Issue number1
StatePublished - Feb 1 2022

ASJC Scopus subject areas

  • Economics and Econometrics


Dive into the research topics of 'Wage offers and on-the-job search'. Together they form a unique fingerprint.

Cite this