Competitive wages in a match with ordered contracts
By: Muriel Niederle
Contributors: National Bureau of Economic Research
Series: NBER working paper series -- working paper 12334; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 12334.
Publisher: National Bureau of Economic Research
Published: 2006
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "A recent antitrust lawsuit against the National Residency Matching Program renewed interest in understanding the effects of a centralized match on wages of medical residents.  Bulow and Levin (forthcoming) propose a simple model of the NRMP, in which firms set impersonal salaries simultaneously, before matching with workers, and show that a match leads to lower aggregate wages compared to any competitive outcome.This paper models a feature present in the NRMP, ordered contracts, that allows firms to set several contracts while determining the order in which they try to fill these contracts.  I show that the low wage equilibrium of Bulow and Levin is not robust to this feature of the NRMP, and competitive wages are once more an equilibrium outcome.  Furthermore, a match with ordered contracts has different properties than former models of centralized matches with multiple contracts"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/28/2006.

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