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Publications
  • 2010
  • Working Paper
  • HBS Working Paper Series

Unraveling Results from Comparable Demand and Supply: An Experimental Investigation

By: Muriel Niederle, Alvin E. Roth and M. Utku Unver
  • Format:Print
  • | Language:English
  • | Pages:48
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Abstract

Markets sometimes unravel, with offers becoming inefficiently early. Often this is attributed to competition arising from an imbalance of demand and supply, typically excess demand for workers. However this presents a puzzle, since unraveling can only occur when firms are willing to make early offers and workers are willing to accept them. We present a model and experiment in which workers' quality becomes known only in the late part of the market. However, in equilibrium, matching can occur (inefficiently) early only when there is comparable demand and supply: a surplus of applicants, but a shortage of high quality applicants.

Keywords

Labor; Marketplace Matching; Quality; Competition; Balance and Stability

Citation

Niederle, Muriel, Alvin E. Roth, and M. Utku Unver. "Unraveling Results from Comparable Demand and Supply: An Experimental Investigation." Harvard Business School Working Paper, No. 10-095, May 2010.
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About The Author

Alvin E. Roth

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More from the Authors

    • 2022
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    When Do Individuals Give Up Agency? The Role of Decision Avoidance

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    • September 2021
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    Kidney Exchange: An Operations Perspective

    By: Itai Ashlagi and Alvin E. Roth
    • June 2021
    • Management Science

    The Role of Beliefs in Driving Gender Discrimination

    By: Katherine B. Coffman, Christine L. Exley and Muriel Niederle
More from the Authors
  • When Do Individuals Give Up Agency? The Role of Decision Avoidance By: Holly Dykstra, Christine L. Exley and Muriel Niederle
  • Kidney Exchange: An Operations Perspective By: Itai Ashlagi and Alvin E. Roth
  • The Role of Beliefs in Driving Gender Discrimination By: Katherine B. Coffman, Christine L. Exley and Muriel Niederle
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