Open AccessJob security, stability, and production efficiency
Author(s) -
Fu Hu,
Kleinberg Robert D.,
Lavi Ron,
Smorodinsky Rann
Publication year - 2017
Publication title -
theoretical economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.404
H-Index - 32
eISSN - 1555-7561
pISSN - 1933-6837
DOI - 10.3982/te2016
Subject(s) - matching (statistics) , production (economics) , stability (learning theory) , job security , set (abstract data type) , class (philosophy) , microeconomics , business , industrial organization , economics , labour economics , computer science , mathematics , work (physics) , artificial intelligence , mechanical engineering , programming language , statistics , machine learning , engineering
We study a two‐sided matching market with a set of heterogeneous firms and workers in an environment where jobs are secured by regulation. Without job security Kelso and Crawford have shown that stable outcomes and efficiency prevail when all workers are gross substitutes to each firm. It turns out that by introducing job security, stability and efficiency may still prevail, and even for a significantly broader class of production functions.