VIENNA JOINT ECONOMICS SEMINAR	INVITATION
R E M I N D E R The University of Vienna and the Department of Economics and Finance at the Institute for Advanced Studies cordially invite you to the following Vienna Joint Economics Seminar Thursday, May 21, 2015 University of Vienna, Oskar-Morgenstern-Platz 1, 1090 Vienna, HS 9, 1^st floor 4:00 pm Matthew R. Backus                         and                        Melvyn Coles Cornell U                                                                             Essex Cheap Talk, Round Numbers and the Economics of Negotiation (Matthew R. Backus) Abstract: Can sellers credibly signal their private information to reduce frictions in negotiations? Guided by a simple cheap-talk model, we posit that impatient sellers use round numbers to signal their willingness to cut prices in order to sell faster, and test its implications using millions of online bargaining interactions. Items listed at multiples of $100 receive offers that are 5% – 8% lower but that arrive 6 – 11 days sooner than listings at neighboring “precise” values, and are 3% – 5% more likely to sell. Offer-level evidence further supports our hypotheses. Similar patterns in real estate transactions suggest that round-number signaling plays a broader role in negotiations.   The cost of job loss (Melvyn Coles) Abstract: This paper considers optimal wage contracts in a search equilibrium when there is learning-by-doing (experience effects), internal promotions (tenure effects), on-the-job search (wage ladder effects) and human capital shocks (layoff shocks). It uses simulated method of moments to decompose wages of young workers by skill groups into their constituent effects. For low skill workers, promotion and job ladder effects are small: wage gains are mainly through learning-by-doing. For high skill workers, promotion and job ladder effects are more sizeable but learning-by-doing effects dominate wage growth. Wage gaps, following job loss, are large and permanent: even after 8 years, the wage loss following layoff is around 20% relative to those not laid off. paper jointly with Ken Burdett and Carlos Carrillo Tudela We are looking forward to seeing you! Institute for Advanced Studies Department of Economics and Finance Stumpergasse 56, 1060 Vienna, Austria Tel.: +43 1 599 91 145 e-Mail: economics@ihs.ac.at http://economics.ihs.ac.at		LINKS DIRECTIONS TO UNIVERSITY OF VIENNA on Google maps VIENNA JOINT ECONOMICS SEMINAR on Google calendar ECONOMICS SEMINARS IN VIENNA on Google calendar
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