Stable Matching on the Job? Theory and Evidence on Internal Talent Markets

Bo Cowgill, Jonathan M. V. Davis (), B. Pablo Montagnes () and Patryk Perkowski ()
Additional contact information
Jonathan M. V. Davis: University of Oregon, Eugene, Oregon 97403
B. Pablo Montagnes: Emory University, Atlanta, Georgia 30322
Patryk Perkowski: Yeshiva University, New York, New York 10033

Management Science, 2025, vol. 71, issue 3, 2508-2526

Abstract: A principal often needs to match agents to perform coordinated tasks, but agents can quit or slack off if they dislike their match. We study two prevalent approaches for matching within organizations: centralized assignment by firm leaders and self-organization through market-like mechanisms. We provide a formal model of the strengths and weaknesses of both methods under different settings, incentives, and production technologies. The model highlights trade-offs between match-specific productivity and job satisfaction. We then measure these trade-offs with data from a large organization’s internal talent market. Firm-dictated matches are 33% more valuable than randomly assigned matches within job categories (using the firm’s preferred metric of quality). By contrast, preference-based matches (using deferred acceptance) are only 5% better than random but are ranked (on average) about 38 percentiles higher by the workforce. The self-organized match is positively assortative and helps workers grow new skills; the firm’s preferred match is negatively assortative and harvests existing expertise.

Keywords: internal labor markets; assortative matching; assignment mechanisms; team formation; matching (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.2023.01373 (application/pdf)

Related works:
Working Paper: Stable Matching on the Job? Theory and Evidence on Internal Talent Markets (2024)
Working Paper: Stable Matching on the Job? Theory and Evidence on Internal Talent Markets (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:71:y:2025:i:3:p:2508-2526

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().