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Job security, stability and production efficiency

Author

Listed:
  • Fu, Hu

    (Department of Computing and Mathematical Sciences, California Institute of Technology)

  • Kleinberg, Robert

    (Department of Computer Science, Cornell University)

  • Lavi, Ron

    (Faculty of Industrial Engineering and Management, Technion -- Israel Institute of Technology)

  • Smorodinsky, Rann

    (Faculty of Industrial Engineering and Management, Technion-- Israel Institute of Technology)

Abstract

We study a 2-sided matching market with a set of heterogeneous firms and workers in an environment where jobs are secured by regulation. Without job security Kelso and Crawford have shown that stable outcomes and efficiency prevail when all workers are (weak) gross substitutes to each firm, in the sense that increases in other workers' salaries can never cause a firm to withdraw an offer from a worker whose salary has not risen. It turns out that by introducing job security, stability and efficiency may still prevail, and even for a significantly broader class of production functions.

Suggested Citation

  • Fu, Hu & Kleinberg, Robert & Lavi, Ron & Smorodinsky, Rann, 2017. "Job security, stability and production efficiency," Theoretical Economics, Econometric Society, vol. 12(1), January.
    • Handle: RePEc:the:publsh:2016
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Sun, Ning & Yang, Zaifu, 2021. "Efficiency, stability, and commitment in senior level job matching markets," Journal of Economic Theory, Elsevier, vol. 194(C).
    2. Ozan Candogan & Saša Pekeč, 2018. "Efficient Allocation and Pricing of Multifeatured Items," Management Science, INFORMS, vol. 64(12), pages 5521-5543, December.
    3. Fu, Hu & Kleinberg, Robert & Lavi, Ron & Smorodinsky, Rann, 2017. "Stability and auctions in labor markets with job security," Economics Letters, Elsevier, vol. 154(C), pages 55-58.
    4. Pavlo Hlasov, 2021. "Improvement of the mechanism of management accounting of enterprise expenses in the conditions of clusterization," Technology audit and production reserves, Socionet;Technology audit and production reserves, vol. 3(4(59)), pages 6-11.

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    More about this item

    Keywords

    Matching; stability; labor market; job security; efficiency;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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