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16:00 - 18:00 26 March 2015

Information Frictions and Observable Experience

Location

Ricardo Lecture Theatre | Drayton House (link Map)
30 Gordon Street | London | WC1H 0AN | United Kingdom

Open to: Academic | Student
Ticketing: Open

Speaker information

Chris Stanton, LSE

Experience often reduces market participants' uncertainty about the potential value of transactions. In many markets, experience is observed, allowing for both sides of the market to respond to trading partners' experience levels. In the online labor market oDesk, workers submit higher wage bids for projects posted by inexperienced employers. This is due to two effects: First, inexperienced employers interview more applicants and hire less frequently, resulting in predictable hassle costs to workers. Second, inexperienced employers have less precise information about the market, which reduces the elasticity of hiring probability to wage bids and increases the optimal bid markup. These two frictions are decomposed using a model of labor demand.


Contact

Department of Economics - Reception
020 7679 5800


Links

Seminar paper


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