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Monotone Matching In Perfect And Imperfect Worlds

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Author Info
Legros, Patrick
Newman, Andrew

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Abstract

We study frictionless matching models in large production economies with and without market imperfections and/or incentive problems. We provide necessary and sufficient distribution-free conditions for monotone matching which depend on the relationship between what we call the segregation payoff - a generalization of the individually rational payoff - and the feasible set for a pair of types. Imperfections have two distinct effects that are relevant for equilibrium matching patterns: they can overwhelm the complementarity properties of the production technology and they can introduce nontransferabilities that make equilibrium matching inefficient. We also use our framework to reveal the source of differences in the comparative static properties of some models in the literature and to explore the effects of distribution on the equilibrium matching pattern.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2396.

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Date of creation: Mar 2000
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Handle: RePEc:cpr:ceprdp:2396

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Related research
Keywords: Assortative Matching; Contracts; Imperfect Markets; Organizations;

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Find related papers by JEL classification:
D30 - Microeconomics - - Distribution - - - General
D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Aloysius Siow, 2009. "Testing Becker's Theory of Positive Assortative Matching," Working Papers tecipa-356, University of Toronto, Department of Economics. [Downloadable!]
  2. Ángel Gavilán, 2006. "Wage inequality, segregation by skill and the price of capital in an assignment model," Banco de España Working Papers 0613, Banco de España. [Downloadable!]
  3. Simon Clark, 2004. "Matching and Sorting with Horizontal Heterogeneity," ESE Discussion Papers 94, Edinburgh School of Economics, University of Edinburgh. [Downloadable!]
  4. Gene Grossman, 2002. "The Distribution of Talent and the Pattern and Consequences of International Trade," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  5. Gene M. Grossman, 1999. "Imperfect Labor Contracts and International Trade," NBER Working Papers 6901, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Grüner, Hans Peter, 2007. "Information Technology, Efficient Restructuring and the Productivity Puzzle," CEPR Discussion Papers 6109, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  7. Arnaud Costinot & Jonathan Vogel, 2009. "Matching and Inequality in the World Economy," NBER Working Papers 14672, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Damiano, Ettore & Li, Hao & Suen, Wing, 2005. "First in village or second in Rome?," Micro Theory Working Papers damiano-05-01-25-10-14-13, Microeconomics.ca Website, revised 26 Jan 2005. [Downloadable!]
    Other versions:
  9. CITANNA, Alessandro & CHAKRABORTY, Archishman, 2002. "Occupational Choice, Incentives and Wealth Redistributions with Scarcity of Capital," Les Cahiers de Recherche 788, HEC Paris. [Downloadable!]
  10. Arnaud Costinot, 2007. "Heterogeneity and Trade," University of California at San Diego, Economics Working Paper Series 2008-04, Department of Economics, UC San Diego. [Downloadable!]
  11. CITANNA, Alessandro & CHAKRABORTY, Archishman, 2001. "Occupational Choice, incentives and wealth distribution," Les Cahiers de Recherche 720, HEC Paris. [Downloadable!]
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  12. Simon Clark, 2006. "The Uniqueness of Stable Matchings," Contributions to Theoretical Economics, Berkeley Electronic Press, vol. 6(1), pages 1283-1283. [Downloadable!] (restricted)
  13. Legros, Patrick & Newman, Andrew, 2002. "Assortative Matching in a Non-transferable World," CEPR Discussion Papers 3469, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  14. Luis Garicano & Esteban Rossi-Hansberg, 2005. "Organization and Inequality in a Knowledge Economy," NBER Working Papers 11458, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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