Labour market screening with intermediaries

Schweinzer, Paul (June 2006): Labour market screening with intermediaries. SFB/TR 15 Discussion Paper No. 138

Abstract

We consider a Rothschild-Stiglitz-Spence labour market screening model and employ a centralised mechanism to coordinate the efficient matching of workers to firms. This mechanism can be thought of as operated by a recruitment agency, an employment office or head hunter. In a centralised descending-bid, multi-item procurement auction, workers submitwage-bids for each job and are assigned stable jobs as equilibrium outcome. We compare this outcome to independent, sequential hiring by firms and conclude that, in general, a stable assignment can only be implemented if firms coordinate to some extent.

• Item Type: Paper
• Keywords: Matching, Multi-item auctions, Sequential auctions, Screening
• Faculties: Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems; Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > A3 - Markt- und Auktionsdesign in komplexen Umgebungen
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: C78, D44, E24, J41
• Language: English