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Random Decentralized Market Processes for Stable Job Matchings with Competitive Salaries

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Publication details

JournalJournal of Economic Theory
DateAccepted/In press - 9 Apr 2016
DateE-pub ahead of print - 19 Apr 2016
DatePublished (current) - Sep 2016
Number of pages12
Pages (from-to)25-36
Early online date19/04/16
Original languageEnglish


We analyze a decentralized process in a basic labor market where finitely
many heterogeneous firms and workers meet directly and randomly in pursuit of
higher payoffs over time and agents may behave myopically. We introduce a general
random decentralized market process that almost surely converges in finite time
to a competitive equilibrium of the market. A key proposition en route to this
result exhibits a finite sequence of successive bilateral trades from an arbitrary
initial market state to a stable matching between firms and workers with a
scheme of competitive salary offers.

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© 2016 Elsevier Inc. All rights reserved. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy. Further copying may not be permitted; contact the publisher for details

    Research areas

  • Competitive salary, Decentralized market, Job matching, Random path, Stability

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