https://macropaperwarehouse.com/authors/axel-gottfries/Axel GottfriesHugo -- gohugo.ioen-usThu, 01 Jan 2026 00:00:00 +0000https://macropaperwarehouse.com/papers/bargaining-with-renegotiation-in-models-with-on-the-job-search/Thu, 01 Jan 2026 00:00:00 +0000https://macropaperwarehouse.com/papers/bargaining-with-renegotiation-in-models-with-on-the-job-search/<p>This paper resolves a long-standing theoretical impasse in labor search models: how to model wage bargaining when workers search on the job (OJS) and the quit rate depends on the wage. Shimer (2006) showed that this wage-dependent turnover creates a potentially non-convex bargaining set, causing the Nash bargaining solution to break down and generating equilibrium multiplicity. Gottfries introduces renegotiation — wages are fixed under a contract that expires at a Poisson rate γ, after which a new wage is bargained — as the device that simultaneously restores uniqueness and nests the earlier models of Pissarides (1994), Mortensen (2003), and Shimer (2006) as limit cases.</p>https://macropaperwarehouse.com/papers/wage-adjustment-in-efficient-long-term-employment-relationships/Thu, 01 Jan 2026 00:00:00 +0000https://macropaperwarehouse.com/papers/wage-adjustment-in-efficient-long-term-employment-relationships/<p>This paper develops a tractable theoretical model of wage dynamics in long-term employment relationships, situated between two polar extremes in the existing literature: continual Nash renegotiation (Mortensen and Pissarides 1994) and wage adjustment only when participation constraints bind (MacLeod and Malcomson 1993). The central motivation is that neither polar extreme matches well-documented empirical facts about wage adjustment — wages are adjusted neither continuously nor as rarely as participation constraints alone would imply.</p>