Contracts versus Salaries in Matching

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Contracts versus Salaries in Matching

594 Workers and firms may bargain over general, multidimensional contracts; they may negotiate over health benefits, housing, retirement plans, etc. Substitutes, on the other hand, is the assumption commonly placed on firms’ preferences to guarantee the existence of stable matchings of workers and firms. In this paper I show that, when firms regard contracts as substitutes, bargaining over cont...

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Contracts versus salaries in matching: A general result

It is shown that a matching market with contracts can be embedded into a matching market with salaries under weaker conditions than substitutability of contracts. In particular, the result applies to the recently studied problem of cadet-to-branch matching. As an application of the embedding result, a new class of mechanisms for matching markets with contracts is defined that generalize the fir...

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On the correspondence of contracts to salaries in (many-to-many) matching

In this note, I extend the work of Echenique (forthcoming) to show that a model of many-to-many matching with contracts may be embedded into a model of many-tomany matching with wage bargaining whenever (1) all agents’ preferences are substitutable and (2) the matching with contracts model is unitary, in the sense that every contractual relationship between a given firm–worker pair is specified...

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Decentralized matching markets with endogenous salaries

In a Shapley-Shubik assignment problem with a supermodular output matrix, we consider games in which each firm makes a take-it-orleave-it salary offer to one applicant, and a match is made only when the offer is accepted by her. We consider both one-shot and multistage games. In either game, we show that there can be many equilibrium salary vectors which are higher or lower than the minimum com...

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Matching with Contracts

We develop a model of matching with contracts which incorporates, as special cases, the college admissions problem, the Kelso-Crawford labor market matching model, and ascending package auctions. We introduce a new “law of aggregate demand” for the case of discrete heterogeneous workers and show that, when workers are substitutes, this law is satisfied by profit-maximizing firms. When workers a...

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ژورنال

عنوان ژورنال: American Economic Review

سال: 2012

ISSN: 0002-8282

DOI: 10.1257/aer.102.1.594