Is it true that Fehr believes markets can't clear?
It's a misunderstanding to say I believe markets *cannot* clear. My research, such as the experiment 'Does Fairness Prevent Market Clearing?', investigates how fairness considerations can *influence* or *hinder* market clearing under certain conditions. For instance, if employers offer wages perceived as unfair, workers might reduce their effort or quit, which can prevent the labor market from reaching a state where supply equals demand. So, fairness is a factor that can impede, but not necessarily prevent, market clearing.
Ask Ernst Fehr the follow-up →