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Nash implementation of competitive equilibria in the job-matching market

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Abstract

This paper studies Nash implementation in the job-matching market where each worker works for only one firm and a firm hires as many workers as it wishes. We show that the competitive equilibrium correspondence (CEC) is the smallest Nash implementable correspondence satisfying individual rationality and Pareto indifference. Furthermore, the CEC is the minimal monotonic extension of the worker-optimal and firm-optimal subcorrespondences. We offer two “good” mechanisms that implement this correspondence in Nash equilibrium.

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Authors and Affiliations

  1. Department of Economics, University of Texas at Austin, Austin, TX, 78712, USA

    Takashi Hayashi

  2. Department of Economics, Yokohama National University, Yokohama, 240-8501, Japan

    Toyotaka Sakai

Authors
  1. Takashi Hayashi
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  2. Toyotaka Sakai
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Corresponding author

Correspondence to Toyotaka Sakai.

Additional information

We are grateful to two anonymous referees, Tridib Sharma, and especially William Thomson for their very helpful comments. We also thank participants at the UT-ITAM conference.

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Hayashi, T., Sakai, T. Nash implementation of competitive equilibria in the job-matching market. Int J Game Theory 38, 453–467 (2009). https://doi.org/10.1007/s00182-009-0163-8

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  • DOI: https://doi.org/10.1007/s00182-009-0163-8

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