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Self-Enforced Job Matching

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  • Ce Liu
  • Ziwei Wang
  • Hanzhe Zhang

Abstract

The classic two-sided many-to-one job matching model assumes that firms treat workers as substitutes and workers ignore colleagues when choosing where to work. Relaxing these assumptions may lead to nonexistence of stable matchings. However, matching is often not a static allocation, but an ongoing process with long-lived firms and short-lived workers. We show that stability is always guaranteed dynamically when firms are patient, even with complementarities in firm technologies and peer effects in worker preferences. While no-poaching agreements are anti-competitive, they can maintain dynamic stability in markets that are otherwise unstable, which may contribute to their prevalence in labor markets.

Suggested Citation

  • Ce Liu & Ziwei Wang & Hanzhe Zhang, 2023. "Self-Enforced Job Matching," Papers 2308.13899, arXiv.org.
    • Handle: RePEc:arx:papers:2308.13899
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    References listed on IDEAS

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    1. Parag A. Pathak & Alvin E. Roth, 2013. "Matching with Couples: Stability and Incentives in Large Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(4), pages 1585-1632.
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    7. John William Hatfield & Fuhito Kojima, 2008. "Matching with Contracts: Comment," American Economic Review, American Economic Association, vol. 98(3), pages 1189-1194, June.
    8. Marek Pycia, 2012. "Stability and Preference Alignment in Matching and Coalition Formation," Econometrica, Econometric Society, vol. 80(1), pages 323-362, January.
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