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Job security, stability, and production efficiency. (English) Zbl 1396.91366
Summary: 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.

MSC:
91B40 Labor market, contracts (MSC2010)
91B68 Matching models
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