- The Experience
- The Programs
- Faculty & Research
- Insights
- Accounting
- Big Data
- Career & Success
- Corporate Governance
- Economics
- Education
- Energy & Environment
- Entrepreneurship
- Finance
- Government
- Health Care
- Innovation
- Leadership
- Management
- Marketing
- Nonprofit
- Operations, Information & Technology
- Organizational Behavior
- Political Economy
- Social Impact
- Supply Chain
- Alumni
- Events
Matching with Contracts
Matching with Contracts
American Economic Review.
2005, Vol. 95, Issue 4, Pages 913-915
We develop a model of matching with contracts which incorporates, as special cases, the college admissions problem, the Kelso-Crawford labor market matching model, and ascending package auctions. We introduce a new "law of aggregate demand" for the case of discrete heterogeneous workers and show that, when workers are substitutes, this law is satisfied by profit-maximizing firms. When workers are substitutes and the law is satisfied, truthful reporting is a dominant strategy for workers in a worker-offering auction/matching algorithm. We also parameterize a large class of preferences satisfying the two conditions.