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Article: A competitive theory of equilibrium and disequilibrium unravelling in two-sided matching

TitleA competitive theory of equilibrium and disequilibrium unravelling in two-sided matching
Authors
Issue Date2000
PublisherWiley-Blackwell Publishing, Inc.. The Journal's web site is located at http://www.rje.org/
Citation
Rand Journal Of Economics, 2000, v. 31 n. 1, p. 101-120 How to Cite?
AbstractI offer a competitive explanation for the rush toward early contracting in matching markets. The explanation does not rely on market power, strategic motives, or instability of the assignment mechanism. Uncertainty about workers' ability will produce inefficient matching if contracts are formed early. However, the insurance gain from early contracting may outweigh the loss from inefficient matching. If firms are risk neutral, it is the mediocre firms that will have the greatest incentive to offer early contracts. Opening up a market for early contracting will generally benefit the firms and hurt the workers. If firms are sufficiently risk averse, even the lowest-quality firms may want to offer early contracts, and a competitive equilibrium may not exist.
Persistent Identifierhttp://hdl.handle.net/10722/85609
ISSN
2015 Impact Factor: 1.582
2015 SCImago Journal Rankings: 3.544
References

 

DC FieldValueLanguage
dc.contributor.authorSuen, Wen_HK
dc.date.accessioned2010-09-06T09:07:08Z-
dc.date.available2010-09-06T09:07:08Z-
dc.date.issued2000en_HK
dc.identifier.citationRand Journal Of Economics, 2000, v. 31 n. 1, p. 101-120en_HK
dc.identifier.issn0741-6261en_HK
dc.identifier.urihttp://hdl.handle.net/10722/85609-
dc.description.abstractI offer a competitive explanation for the rush toward early contracting in matching markets. The explanation does not rely on market power, strategic motives, or instability of the assignment mechanism. Uncertainty about workers' ability will produce inefficient matching if contracts are formed early. However, the insurance gain from early contracting may outweigh the loss from inefficient matching. If firms are risk neutral, it is the mediocre firms that will have the greatest incentive to offer early contracts. Opening up a market for early contracting will generally benefit the firms and hurt the workers. If firms are sufficiently risk averse, even the lowest-quality firms may want to offer early contracts, and a competitive equilibrium may not exist.en_HK
dc.languageengen_HK
dc.publisherWiley-Blackwell Publishing, Inc.. The Journal's web site is located at http://www.rje.org/en_HK
dc.relation.ispartofRAND Journal of Economicsen_HK
dc.titleA competitive theory of equilibrium and disequilibrium unravelling in two-sided matchingen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0741-6261&volume=31&spage=101&epage=120&date=2000&atitle=A+Competitive+Theory+of+Equilibrium+and+Disequilibrium+Unraveling+in+Two-Sided+Matchingen_HK
dc.identifier.emailSuen, W: hrneswc@hkucc.hku.hken_HK
dc.identifier.authoritySuen, W=rp00066en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.scopuseid_2-s2.0-0034410372en_HK
dc.identifier.hkuros50208en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-0034410372&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume31en_HK
dc.identifier.issue1en_HK
dc.identifier.spage101en_HK
dc.identifier.epage120en_HK
dc.publisher.placeUnited Statesen_HK
dc.identifier.scopusauthoridSuen, W=7006977946en_HK

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