November 21, 2025EntropyOpen Access

A Cognitive Perspective on Information Frictions in Labor Markets

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Labor market efficiency declines due to fluctuation in cognitive factors, especially during economic downturns.
Model shows cognitive factors shift focus from job applications to market learning in response to uncertainty.
Analysis using theoretical modeling approach to illustrate implications of cognitive behavior on job matching efficiency.
Findings suggest implications for unemployment persistence highlight the importance of cognitive factors in labor economics.

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Theoretical model demonstrates cognitive factors influence labor markets, suggesting belief misalignment affects job matching.

Zhang et al. (2025) studied this question.

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