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Marketplace Institutions Related to the Timing of Transactions: Reply to Priest

  • Alvin E. Roth

In this reply I describe the unraveling of transaction dates in several markets, including the labor market for new lawyers hired by large law firms. This and other markets illustrate that unraveling can occur in markets with competitive prices, that it can result in substantial inefficiencies, and that marketplace institutions play a role in restoring efficiency. All of these contradict the conclusions of Priest.

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File URL: http://dx.doi.org/10.1086/663621
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File URL: http://dx.doi.org/10.1086/663621
Download Restriction: Access to the online full text or PDF requires a subscription.

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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 30 (2012)
Issue (Month): 2 ()
Pages: 479 - 494

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Handle: RePEc:ucp:jlabec:doi:10.1086/663621
Contact details of provider: Web page: http://www.journals.uchicago.edu/JOLE/

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  1. Roth, Alvin E., 1984. "The Evolution of the Labor Market for Medical Interns and Residents: A Case Study in Game Theory," Scholarly Articles 29410143, Harvard University Department of Economics.
  2. Dan Ariely & Axel Ockenfels & Alvin E Roth, 2003. "An Experimental Analysis of Ending Rules in Internet Auctions," Levine's Bibliography 506439000000000433, UCLA Department of Economics.
  3. Alvin E. Roth & Tayfun Sonmez & M. Utku Unver, 2003. "Kidney Exchange," NBER Working Papers 10002, National Bureau of Economic Research, Inc.
  4. Peter Coles & Alexey Kushnir & Muriel Niederle, 2013. "Preference Signaling in Matching Markets," American Economic Journal: Microeconomics, American Economic Association, vol. 5(2), pages 99-134, May.
  5. 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.
  6. John William Hatfield & Scott Duke Kominers & Alexandru Nichifor & Michael Ostrovsky & Alexander Westkamp, 2013. "Stability and Competitive Equilibrium in Trading Networks," Journal of Political Economy, University of Chicago Press, vol. 121(5), pages 966 - 1005.
  7. C. Nicholas McKinney & Muriel Niederle & Alvin E. Roth, 2005. "The Collapse of a Medical Labor Clearinghouse (and Why Such Failures Are Rare)," American Economic Review, American Economic Association, vol. 95(3), pages 878-889, June.
  8. Alvin E. Roth & Tayfun Sönmez & M. Utku Ünver, 2004. "Pairwise Kidney Exchange," Boston College Working Papers in Economics 620, Boston College Department of Economics.
  9. Coles, Peter Andrew & Levine, Phillip B. & Roth, Alvin E. & Cawley, John & Niederle, Muriel & Siegfried, John J., 2010. "The Job Market for New Economists: A Market Design Perspective," Scholarly Articles 5343168, Harvard University Department of Economics.
  10. Soohyung Lee & Muriel Niederle, 2015. "Propose with a rose? Signaling in internet dating markets," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 731-755, December.
  11. Axel Ockenfels & Alvin E. Roth, 2003. "Late and Multiple Bidding in Second Price Internet Auctions: Theory and Evidence Concerning Different Rules for Ending an Auction," CESifo Working Paper Series 992, CESifo Group Munich.
  12. John H. Kagel & Alvin E. Roth, 2000. "The Dynamics of Reorganization in Matching Markets: A Laboratory Experiment Motivated by a Natural Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 115(1), pages 201-235.
  13. Christopher Avery & Jonathan D. Levin, 2009. "Early Admissions at Selective Colleges," NBER Working Papers 14844, National Bureau of Economic Research, Inc.
  14. Hanna W. Halaburda, 2008. "Unravelling in Two-Sided Matching Markets and Similarity of Preferences," Harvard Business School Working Papers 09-068, Harvard Business School.
  15. Kamecke, Ulrich, 1998. "Wage Formation in a Centralized Matching Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 33-53, February.
  16. Guillaume Frechette & Alvin E. Roth & M. Utku Ünver, 2004. "Unraveling Yields Inefficient Matchings: Evidence from Post- Season College Football Bowls," Microeconomics 0404001, EconWPA, revised 24 Sep 2004.
  17. M. Utku Ünver, 1999. "Backward Unraveling over Time: The Evolution of Strategic Behavior in the Entry-Level British Medical Labor Markets," Computing in Economics and Finance 1999 1132, Society for Computational Economics.
  18. George L. Priest, 2010. "Timing "Disturbances" in Labor Market Contracting: Roth's Findings and the Effects of Labor Market Monopsony," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 447-472, 04.
  19. Hao Li & Wing Suen, 2000. "Risk Sharing, Sorting, and Early Contracting," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 1058-1087, October.
  20. Muriel Niederle, 2006. "Competitive Wages in a Match with Ordered Contracts," NBER Working Papers 12334, National Bureau of Economic Research, Inc.
  21. Jeremy Bulow & Jonathan Levin, 2005. "Matching and Price Competition," NBER Working Papers 11506, National Bureau of Economic Research, Inc.
  22. Alvin E. Roth & Axel Ockenfels, 2002. "Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet," American Economic Review, American Economic Association, vol. 92(4), pages 1093-1103, September.
  23. Li, Hao & Rosen, Sherwin, 1998. "Unraveling in Matching Markets," American Economic Review, American Economic Association, vol. 88(3), pages 371-87, June.
  24. Ettore Damiano & Hao Li & Wing Suen, 2005. "Unravelling of Dynamic Sorting," Review of Economic Studies, Oxford University Press, vol. 72(4), pages 1057-1076.
  25. Fuhito Kojima, 2007. "Matching and Price Competition: Comment," American Economic Review, American Economic Association, vol. 97(3), pages 1027-1031, June.
  26. Muriel Niederle & Leeat Yariv, 2009. "Decentralized Matching with Aligned Preferences," NBER Working Papers 14840, National Bureau of Economic Research, Inc.
  27. Paul Milgrom, 2003. "Matching with Contracts," Working Papers 03003, Stanford University, Department of Economics.
  28. Roth, Alvin E & Xing, Xiaolin, 1994. "Jumping the Gun: Imperfections and Institutions Related to the Timing of Market Transactions," American Economic Review, American Economic Association, vol. 84(4), pages 992-1044, September.
  29. 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.
  30. Posner, Richard A. & Avery, Christopher & Jolls, Christine & Roth, Alvin, 2001. "The Market for Federal Judicial Law Clerks," Scholarly Articles 2623748, Harvard University Department of Economics.
  31. Kelso, Alexander S, Jr & Crawford, Vincent P, 1982. "Job Matching, Coalition Formation, and Gross Substitutes," Econometrica, Econometric Society, vol. 50(6), pages 1483-1504, November.
  32. Elliott Peranson & Alvin E. Roth, 1999. "The Redesign of the Matching Market for American Physicians: Some Engineering Aspects of Economic Design," American Economic Review, American Economic Association, vol. 89(4), pages 748-780, September.
  33. Ettore Damiano & Hao Li, 2004. "Unraveling of Dynamic Sorting," Econometric Society 2004 Latin American Meetings 72, Econometric Society.
  34. Mongell, Susan & Roth, Alvin E, 1991. "Sorority Rush as a Two-Sided Matching Mechanism," American Economic Review, American Economic Association, vol. 81(3), pages 441-64, June.
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