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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.
    2. Ning Sun & Zaifu Yang, 2006. "Equilibria and Indivisibilities: Gross Substitutes and Complements," Econometrica, Econometric Society, vol. 74(5), pages 1385-1402, September.
    3. Thành Nguyen & Rakesh Vohra, 2018. "Near-Feasible Stable Matchings with Couples," American Economic Review, American Economic Association, vol. 108(11), pages 3154-3169, November.
    4. Alan B. Krueger & Orley Ashenfelter, 2022. "Theory and Evidence on Employer Collusion in the Franchise Sector," Journal of Human Resources, University of Wisconsin Press, vol. 57(S), pages 324-348.
    5. Alvin E. Roth, 2018. "Marketplaces, Markets, and Market Design," American Economic Review, American Economic Association, vol. 108(7), pages 1609-1658, July.
    6. Sorin, Sylvain, 1992. "Repeated games with complete information," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 4, pages 71-107, Elsevier.
    7. Morimitsu Kurino, 2020. "Credibility, efficiency, and stability: a theory of dynamic matching markets," The Japanese Economic Review, Springer, vol. 71(1), pages 135-165, January.
    8. John William Hatfield & Fuhito Kojima, 2008. "Matching with Contracts: Comment," American Economic Review, American Economic Association, vol. 98(3), pages 1189-1194, June.
    9. Marek Pycia, 2012. "Stability and Preference Alignment in Matching and Coalition Formation," Econometrica, Econometric Society, vol. 80(1), pages 323-362, January.
    10. Fuhito Kojima & Ning Sun & Ning Neil Yu, 2020. "Job Matching under Constraints," American Economic Review, American Economic Association, vol. 110(9), pages 2935-2947, September.
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    Cited by:

    1. Kotowski, Maciej H., 2024. "A perfectly robust approach to multiperiod matching problems," Journal of Economic Theory, Elsevier, vol. 222(C).

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