This paper examines efficient and equilibrium allocations in an economy where agents with diverse characteristics are matched through a time-consuming process to produce output. This is cast in a labour market where workers of different skills match with machines of different qualities. The efficient assignment is not always positively assortative and can be decentralized by a competitive mechanism where firms compete by posting wages and committing to the skill that their chosen machines are intended for. Implications on wage inequality are examined.
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- Sattinger, Michael, 1995. "Search and the Efficient Assignment of Workers to Jobs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(2), pages 283-302, May.
- Boyan Jovanovic, 1998.
"Vintage Capital and Inequality,"
NBER Working Papers
6416, National Bureau of Economic Research, Inc.
- Daron Acemoglu & Robert Shimer, 1998.
"Holdups and Efficiency with Search Frictions,"
98-14, Massachusetts Institute of Technology (MIT), Department of Economics.
- repec:fth:starer:9816 is not listed on IDEAS
- Jovanovic, B., 1998.
"Vintage Capital and Equality,"
98-16, C.V. Starr Center for Applied Economics, New York University.
- repec:bla:restud:v:57:y:1990:i:2:p:279-98 is not listed on IDEAS
- Mortensen, Dale T, 1982. "Property Rights and Efficiency in Mating, Racing, and Related Games," American Economic Review, American Economic Association, vol. 72(5), pages 968-79, December.
- Julien, B. & Kennes, J. & King, I., 1998.
"Bidding for Labour,"
dp98-03, Department of Economics, Simon Fraser University.
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