Competitive Wages in a Match with Ordered Contracts
22 Pages Posted: 14 Jul 2006 Last revised: 15 Sep 2022
Date Written: June 2006
Abstract
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.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
The Market for Federal Judicial Law Clerks
By Christopher Avery, Christine Jolls, ...
-
The New Market for Federal Judicial Law Clerks
By Christopher Avery, Christine Jolls, ...
-
The New Market for Federal Judicial Law Clerks
By Christopher Avery, Christine Jolls, ...
-
Matching and Price Competition
By Jeremy Bulow and Jonathan Levin
-
Matching and Price Competition
By Jeremy Bulow and Jonathan Levin
-
By Ernan Haruvy, Alvin E. Roth, ...
-
Unraveling Yields Inefficient Matchings: Evidence from Post-Season College Football Bowls
By Guillaume R. Fréchette, Alvin E. Roth, ...
-
The Collapse of a Medical Clearinghouse (and Why Such Failures are Rare)
By C. Nicholas Mckinney, Muriel Niederle, ...
-
Market Culture: How Norms Governing Exploding Offers Affect Market Performance
By Muriel Niederle and Alvin E. Roth