The Best Thing About Libra Is Often Overlooked—and Its Creators Explain Why
Citation:
Catalini, Christian, and Scott Kominers. "The Best Thing About Libra Is Often Overlooked—and Its Creators Explain Why." Quartz (October 18, 2019). View Details|
Article American Economic Review: Papers and Proceedings May 2014 Investment Incentives in Labor Market Matching |
Abstract
We provide an illustration of how the design of labor market clearing mechanisms can affect incentives for human capital acquisition. Specifically, we extend the labor market matching model (with discrete transfers) of Kelso and Crawford (1982) to incorporate the possibility that agents may invest in human capital before matching. We show that in this setting, the worker-optimal stable matching mechanism incentivizes workers to make (nearly) efficient human capital investments. En route to our main result, we show that so long as the space of salaries is sufficiently rich, every stable outcome in the Kelso and Crawford (1982) setting is approximately efficient.
Keywords: Human Capital; Marketplace Matching;
Citation:
Hatfield, John William, Fuhito Kojima, and Scott Duke Kominers. "Investment Incentives in Labor Market Matching." American Economic Review: Papers and Proceedings 104, no. 5 (May 2014): 436–441.
