CORDIS Project
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This project explores the impact of reference dependence on labor market dynamics, particularly how workers' perceptions of fairness affect wage rigidity and unemployment. It aims to provide insights into labor market responses to economic fluctuations.
The proposed project is concerned with Reference Dependence and Labor-Market Fluctuations (RDLMF).
It aims to incorporate a fairness-based account of the labor relation into a search-and-matching (S&M) model of the labor market in which workers' "productivity" fluctuates across time periods.
Our analysis will explore the theoretical implications for equilibrium wage and unemployment fluctuations.
We propose a framework, which as in Akerlof (1982), workers' morale (and therefore their willingness…
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