Citation:
Journal of Economic Theory. October 1998, vol. 82, nº 2, p. 469-480
ISSN:
0022-0531
DOI:
10.1006/jeth.1997.2447
Sponsor:
Our work is partially supported by DGCYT, projects
PB 92 0590 and PB 94 1504, and Institut Valencia d'Inverstigacions Economiques. Romero-
Medina also acknowledges financial support from the Ministerio de Educación y Cultura
(Spain).
We implement the stable correspondence of a job matching market in Subgame Perfect Equilibrium. We use a simple sequential mechanism in which firms propose a salary to each worker (first stage) and, then, each worker accepts at most one proposal (second stage)We implement the stable correspondence of a job matching market in Subgame Perfect Equilibrium. We use a simple sequential mechanism in which firms propose a salary to each worker (first stage) and, then, each worker accepts at most one proposal (second stage). Moreover, if agents' preferences are additive, this mechanism implements in Subgame Perfect Equilibrium the firms' optimal corre- spondence when firms use undominated strategies. Finally, we construct another simple sequential mechanism where the order of decisions is permuted and which implements the workers' optimal correspondence when agents' preferences are additive.[+][-]