Nash implementation of competitive equilibria in the job-matching market

Nash implementation of competitive equilibria in the job-matching market

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Article ID: iaor200972160
Country: Germany
Volume: 38
Issue: 4
Start Page Number: 453
End Page Number: 467
Publication Date: Nov 2009
Journal: International Journal of Game Theory
Authors: ,
Keywords: game theory
Abstract:

This paper studies Nash implementation in the job-matching market where each worker works for only one firm and a firm hires as many workers as it wishes. We show that the competitive equilibrium correspondence (CEC) is the smallest Nash implementable correspondence satisfying individual rationality and Pareto indifference. Furthermore, the CEC is the minimal monotonic extension of the worker-optimal and firm-optimal subcorrespondences. We offer two ‘good’ mechanisms that implement this correspondence in Nash equilibrium.

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