Vacancy chains and equilibration in senior-level labor markets
In senior-level labor markets unfilled positions (caused by retirement of worker or by creation of new jobs) are often filled with candidates who are themselves incumbents in other similar position; thus creating a chain of vacancies that propagates from firm to firm. In this paper we apply the stable marriage model of Gale and Shapley (in which the two sided are {open_quotes}firms{close_quotes} and {open_quotes}workers{close_quotes}) to study this re-equilibration process. We show that a simple {open_quotes}deferred acceptance{close_quotes} algorithm in which firms with vacant position propose to workers who could hold at most one position at a time, would always produce a stable matching (assuming that the market was initially stable). This algorithm generates a matching that is independent of the order of proposals and optimal for the firms in a well defined subset of the stable matchings. We also show that this re-equilibration process is monotone and preserves individual firm-optimality. Once we assume that the {open_quotes}deferred acceptance{close_quotes} algorithm is the equilibration process, the workers and firms have to decide how to act when the algorithm works (an agent must not act truly according to its/her true preferences). This decision problem define a game where the strategy space is any profile of preferences. We show that in this game it is optimal for each firm to act truly and to reveal its true preferences, independently of how the other agents play. This result is shown to be untrue for the workers. In particular, workers have often incentives to deviate from their true preferences. We also show that an equilibrium always exist in this game and we characterize some matchings that can result from strategies that form an equilibrium. Finally, we show that each matching that results from equilibrium is stable for the true preferences.
- OSTI ID:
- 35845
- Report Number(s):
- CONF-9408161-; TRN: 94:009753-0106
- Resource Relation:
- Conference: 15. international symposium on mathematical programming, Ann Arbor, MI (United States), 15-19 Aug 1994; Other Information: PBD: 1994; Related Information: Is Part Of Mathematical programming: State of the art 1994; Birge, J.R.; Murty, K.G. [eds.]; PB: 312 p.
- Country of Publication:
- United States
- Language:
- English
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