Labour market recruiting with intermediaries

Research output: Contribution to journalArticlepeer-review

Abstract

We consider a Rothschild-Stiglitz-Spence labour market model and employ a centralised mechanism to coordinate the efficient matching of workers to firms. This mechanism can be thought of as operated by a recruitment agency, an employment office or head hunter. In a centralised descending-bid, multi-item procurement auction, workers submit wage-bids for each job and are assigned stable jobs as equilibrium outcome. We compare this outcome to independent, sequential hiring by firms and conclude that, in general, a stable assignment can only be implemented if firms coordinate to some extent.

Original languageEnglish
Pages (from-to)119-127
Number of pages9
JournalREVIEW OF ECONOMIC DESIGN
Volume12
Issue number2
DOIs
Publication statusPublished - Jun 2008

Keywords

  • Matching
  • Multi-item auctions
  • Sequential auctions

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