Core stability and core selection in a decentralized labor matching market
type: Item
instance of: scholarly article
title: Core stability and core selection in a decentralized labor matching market
zbMATH Open document ID: 1405.91330
author: Heinrich H. Nax
author: Bary S. R. Pradelski
published in: Games
publication date: 2018-07-10T00:00:00Z
review text: Summary: We propose a dynamic model of decentralized many-to-one matching in the context of a competitive labor market. Through wage offers and wage demands, firms compete over workers and workers compete over jobs. Firms make hire-and-fire decisions dependent on the wages of their own workers and on the alternative workers available on the job market. Workers bargain for better jobs; either individually or collectively as unions, adjusting wage demands upward/downward depending on whether they are currently employed/unemployed. We show that such a process is absorbed into the core with probability one in finite time. Moreover, within the core, allocations are selected that are characterized by surplus splitting according to a bargaining solution such that (i) firms and workforce share total revenue according to relative bargaining strengths, and (ii) workers receive equal workforce shares above their individual outside options. These results bridge empirical evidence and provide a rich set of testable predictions.
Mathematics Subject Classification ID: 91B40
Mathematics Subject Classification ID: 91A12
Mathematics Subject Classification ID: 91A22
Mathematics Subject Classification ID: 91B68
Mathematics Subject Classification ID: 91B26
zbMATH DE Number: 6901006
zbMATH Keywords: cooperative games
zbMATH Keywords: core
zbMATH Keywords: evolutionary games
zbMATH Keywords: matching
zbMATH Keywords: generalized Nash bargaining solution
MaRDI profile type: Publication
full work available at URL: g7020010
OpenAlex ID: W2326341771
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DOI: 10.3390/G7020010
description: scientific article; zbMATH DE number 6901006