Labour market screening with intermediaries

Paul Schweinzer

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: We consider a Rothschild-Stiglitz-Spence labour market screening model and employ a centralised mechanism to coordinate the efficient matching of workers to firms. This mechanism can be thought of as operated by a recruitment agency, an employment office or head hunter. In a centralised descending-bid, multi-item procurement auction, workers submitwage-bids for each job and are assigned stable jobs as equilibrium outcome. We compare this outcome to independent, sequential hiring by firms and conclude that, in general, a stable assignment can only be implemented if firms coordinate to some extent.

Keywords: Matching; Multi-item auctions; Sequential auctions; Screening (search for similar items in EconPapers)
JEL-codes: C78 D44 E24 J41 (search for similar items in EconPapers)
Date: 2006-06
New Economics Papers: this item is included in nep-lab and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:138

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