Fixed search costs, that is, costs that do not vary with search duration, can amplify the cyclical volatility of the labor market. To assess the size of fixed costs, we analyze the relation between search costs and search duration using German establishment data. An instrumental variable estimation shows no relation between search duration and search costs. We conclude that search costs are mainly fixed costs. Furthermore, we show that a search and matching model, calibrated for Germany with fixed costs close to 75%, can generate labor market volatility that is consistent with the data.

This study tests the prevalence of choice overload (CO) in the U.S. beer market. We reveal that even if CO exists, sellers have mechanisms to reduce CO's negative consequences. The article describes the implementation of search cost-reducing private nudges (i.e., product quality scores and prominently listed specials) sellers commonly utilize to minimize CO's negative consequences. Our results suggest that, while CO exists for some buyers, it can be eliminated by market interactions on the part of the seller. (JEL Classifications: C93, D03, Q13)