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Unraveling over time

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  • Ambuehl, Sandro
  • Groves, Vivienne

Abstract

Unraveling, the excessively early matching of future workers to employers, leads to hiring decisions based on severely incomplete information. We provide a model of unraveling in a one-to-one matching market without transfers. Its distinguishing feature is the gradual arrival of information about students that occurs over an extended period of time during which matches can be made. In equilibrium, the market spreads thinly over that period and employers' attractiveness to students is uncorrelated with their worker's productivity. Our model connects previous, seemingly unrelated models of unraveling and it highlights the implications of the two-period assumption on which they rely. Our setting permits the analysis of information timing policies. These are effective only if they provide a sudden and sufficiently large surge in information. Our main application is in the market for clerks to U.S. Federal Appellate Courts, a significant input into the efficiency of the justice system.

Suggested Citation

  • Ambuehl, Sandro & Groves, Vivienne, 2020. "Unraveling over time," Games and Economic Behavior, Elsevier, vol. 121(C), pages 252-264.
    • Handle: RePEc:eee:gamebe:v:121:y:2020:i:c:p:252-264
    DOI: 10.1016/j.geb.2020.02.009
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    References listed on IDEAS

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    1. Alvin E Roth & Richard A Posner & Christine Jolls & Christopher Avery, 2007. "The New Market for Federal Judicial Law Clerks," Levine's Bibliography 843644000000000288, UCLA Department of Economics.
    2. Haruvy, Ernan & Roth, Alvin E. & Unver, M. Utku, 2006. "The dynamics of law clerk matching: An experimental and computational investigation of proposals for reform of the market," Journal of Economic Dynamics and Control, Elsevier, vol. 30(3), pages 457-486, March.
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    Cited by:

    1. Okudaira, Hiroko, 2020. "Regulating the timing of job search: evidence from the labor market for new college graduates," Labour Economics, Elsevier, vol. 67(C).
    2. Yann Bramoullé & Brian W. Rogers & Erdem Yenerdag, 2022. "Matching with Recall," AMSE Working Papers 2203, Aix-Marseille School of Economics, France.

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