Random decentralized market processes for stable job matchings with competitive salaries

Bo Chen, Satoru Fujishige and Zaifu Yang

Journal of Economic Theory, 2016, vol. 165, issue C, 25-36

Abstract: We analyze a decentralized process in a basic labor market where finitely many heterogeneous firms and workers meet directly and randomly in pursuit of higher payoffs over time and agents may behave myopically. We find a general random decentralized market process that almost surely converges in finite time to a competitive equilibrium of the market. A key proposition en route to this result exhibits a finite sequence of successive bilateral trades from an arbitrary initial market state to a stable matching between firms and workers with a scheme of competitive salary offers.

Keywords: Decentralized market; Job matching; Random path; Competitive salary; Stability (search for similar items in EconPapers)
JEL-codes: C62 D72 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:165:y:2016:i:c:p:25-36

DOI: 10.1016/j.jet.2016.04.003

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