Local stability constraints

Esteban Peralta ()
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Esteban Peralta: University of Michigan

Economic Theory Bulletin, 2022, vol. 10, issue 2, No 7, 273-281

Abstract: Abstract This note revisits the well-known class of one-to-one, frictionless labor-matching markets with perfect transferable utilities and heterogeneous agents. It is shown that when the surplus is increasing and exhibits increasing differences, stability can be characterized by the absence of local blocks; namely, blocks involving a firm and a worker that is matched to a firm with an attribute that is either the same or adjacent to that of the blocking firm. A similar result holds when the surplus is decreasing and exhibits decreasing differences, illustrating that these assumptions not only guarantee assortativeness with respect to agents’ attributes, but also the redundancy of global stability constraints.

Keywords: Local blocks; Modularity; Stability; Surplus (search for similar items in EconPapers)
JEL-codes: C71 C78 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s40505-022-00232-4

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