A continuous-time job search model: General renewal processes

In this paper the authors study a continuous time job search model introduced by Zuckerman: Job offers are received randomly over time according to a (general) renewal process. The offer wages are assumed to be independent and identically distributed random variables. The objective of the ‘job searcher’ is to choose a stopping time which maximizes the expected net return. The main contribution of this paper is that the authors give a unified approach to solve the job searcher’s problem for general interarrival time distributions (in a finite and an infinite horizon setting). In general, an optimal strategy does not necessarily stop at a time at which a job is offered. Further, the authors give various examples of what the optimal strategy looks like in specific submodels. The results obtained by Zuckerman follow immediately from the results presented here.