Search Theory

Discipline: Economics

Search theory is the analysis of how buyers and sellers acquire information about market conditions and how potential market participants are brought together. Its application to labor markets was pioneered by the American economist GEORGE STIGLER (1911-1991).

Search theory recognizes the principle that both employers and workers need to invest time and other resources to meet if mobility in the labor market is to continue.

Also see: crowding hypothesis, dual labor market theory, insider-outsider wage determination, labor market discrimination, segmented labor market theory

Source:
G J Stigler, 'Information in the Labor Market', Journal of Political Economy, vol. LXX (October, 1962), 94-105;
D. Mortensen, 'Job Search and Labor Market Analysis', Handbook of Labor Economics, R Layard and O Ashenfelter, eds (Amsterdam, 1984)

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