Matching workers to firms facing budget constraints

Amirreza Ahmadzadeh and Behrang Kamali Shahdadi

Economics Letters, 2024, vol. 245, issue C

Abstract: We study a many-to-one matching model with salaries in which firms face budget constraints. Mongell and Roth (1986) show that when firms face a budget constraint, a stable matching may not exist. We introduce an algorithm to find a strong stable matching by changing the budget of firms such that the total budget remains the same and each firm’s budget change is bounded by the value of at most one worker for that firm.

Keywords: Matching theory; Market design; Labor market (search for similar items in EconPapers)
JEL-codes: C71 C78 D47 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:245:y:2024:i:c:s0165176524005329

DOI: 10.1016/j.econlet.2024.112048

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