Unraveling over time

Sandro Ambuehl and Vivienne Groves
Authors registered in the RePEc Author Service: Sandro Ambühl

Games and Economic Behavior, 2020, vol. 121, issue C, 252-264

Abstract: Unraveling, the excessively early matching of future workers to employers, leads to hiring decisions based on severely incomplete information. We provide a model of unraveling in a one-to-one matching market without transfers. Its distinguishing feature is the gradual arrival of information about students that occurs over an extended period of time during which matches can be made. In equilibrium, the market spreads thinly over that period and employers' attractiveness to students is uncorrelated with their worker's productivity. Our model connects previous, seemingly unrelated models of unraveling and it highlights the implications of the two-period assumption on which they rely. Our setting permits the analysis of information timing policies. These are effective only if they provide a sudden and sufficiently large surge in information. Our main application is in the market for clerks to U.S. Federal Appellate Courts, a significant input into the efficiency of the justice system.

Keywords: Unraveling; Two-sided matching; Continuous time game; Law clerks (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Unraveling Over Time (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:121:y:2020:i:c:p:252-264

DOI: 10.1016/j.geb.2020.02.009

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