The collapse of a medical clearinghouse (and why such failures are rare)
The collapse of the clearinghouse for the entry-level gastroenterology labor market offers a unique opportunity to study how stable clearinghouses succeed and fail. To explore the reasons for the failure of the clearinghouse (and why failures of this kind of clearinghouse have been so rare), we conduct an experimental investigation of demand shocks of the kind that occurred in the gastroenterology market. We find that a reduction in demand for positions leads to the collapse of the match only when it is detectable by firms before being detected by workers (as in the unexpected shock that took place in 1996, which could be seen by firms in their reduced applicant pools). Simple demand and supply imbalances do not seem to interfere with the operation of the centralized match. Our results suggest an affirmative answer to the question posed by market participants about whether the clearinghouse could be successfully restarted, and that this would relieve some of the distress now reported in that market, by allowing it to operate later, at a more uniform time, and with more national scope.
|Date of creation:||Feb 2003|
|Date of revision:|
|Publication status:||published as McKinney, C. Nicholas, Muriel Niederle and Alvin E. Roth. “The Collapse of a Medical Labor Clearinghouse (and Why Such Failures are Rare).” The American Economic Review 95, 3 (June 2005): 878-889.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
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- Roth, Alvin E, 1991. "A Natural Experiment in the Organization of Entry-Level Labor Markets: Regional Markets for New Physicians and Surgeons in the United Kingdom," American Economic Review, American Economic Association, vol. 81(3), pages 415-40, June.
- Alvin E. Roth & Elliott Peranson, 1999.
"The Redesign of the Matching Market for American Physicians: Some Engineering Aspects of Economic Design,"
NBER Working Papers
6963, National Bureau of Economic Research, Inc.
- 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.
- Muriel Niederle & Alvin E. Roth, 2004.
"Market Culture: How Norms Governing Exploding Offers Affect Market Performance,"
NBER Working Papers
10256, National Bureau of Economic Research, Inc.
- Muriel Niederle & Alvin E. Roth, 2004. "Market Culture: How Norms Governing Exploding Offers Affect Market Performance," Levine's Bibliography 122247000000000207, UCLA Department of Economics.
- Muriel Niederle & Alvin E. Roth, 2004. "Market Culture: How Norms Governing Exploding Offers Affect Market Performance," Levine's Bibliography 122247000000000018, UCLA Department of Economics.
- Roth, Alvin E & Xing, Xiaolin, 1997. "Turnaround Time and Bottlenecks in Market Clearing: Decentralized Matching in the Market for Clinical Psychologists," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 284-329, April.
- 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.
- Alvin E Roth & Richard A Posner & Christine Jolls & Christopher Avery, 2007.
"The New Market for Federal Judicial Law Clerks,"
843644000000000288, UCLA Department of Economics.
- Li, Hao & Rosen, Sherwin, 1998. "Unraveling in Matching Markets," American Economic Review, American Economic Association, vol. 88(3), pages 371-87, June.
- 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.
- 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.
- Ernan Haruvy & Alvin E. Roth & M. Utku Unver, 2004.
"The Dynamics of Law Clerk Matching: An Experimental and Computational Investigation of Proposals for Reform of the Market,"
- 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.
- 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.
- Avery, Christopher & Fairbanks, Andrew & Zeckhauser, Richard, 2001. "What Worms for the Early Bird: Early Admissions at Elite Colleges," Working Paper Series rwp01-049, Harvard University, John F. Kennedy School of Government.
- Muriel Niederle & Alvin E. Roth, 2003.
"Unraveling Reduces Mobility in a Labor Market: Gastroenterology with and without a Centralized Match,"
Journal of Political Economy,
University of Chicago Press, vol. 111(6), pages 1342-1352, December.
- Muriel Niederle & Alvin E Roth, 2003. "Unraveling Reduces Mobility in a Labor Market: Gastroenterology with and without a Centralized Match," Levine's Working Paper Archive 506439000000000428, David K. Levine.
- Wing Suen, 2000. "A Competitive Theory of Equilibrium and Disequilibrium Unravelling in Two-Sided Matching," RAND Journal of Economics, The RAND Corporation, vol. 31(1), pages 101-120, Spring.
- Roth, Alvin E, 1984. "The Evolution of the Labor Market for Medical Interns and Residents: A Case Study in Game Theory," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 991-1016, December.
- 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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