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The Economic Research Institute, Stockholm School of Economics SSE/EFI Working Paper Series in Economics and Finance

No 201:
Hierarchical Assignments: Stability and Fairness

Kimmo Eriksson, Johan Karlander and Lars-Erik Íller ()

Abstract: We study a simple model of the job market, where workers are assigned to employers. We specify conditions under which the market is hierarchical in a natural sense. For such hierarchies, we can state explicit values for the earnings in the worker-optimal and employer-optimal solutions. This is a discrete analogue to the Ricardian differential rent model of Sattinger (1979). We discuss the compatibility problems between fairness and stability of earnings and assignments and argue for a certain solution.

Keywords: Hierarchies; assignment; fairness; envy; (follow links to similar papers)

JEL-Codes: C78; (follow links to similar papers)

15 pages, October 27, 1997

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This paper is published as:
Eriksson, Kimmo, Johan Karlander and Lars-Erik Íller, (2000), 'Becker's assortative assignments: stability and fairness', Mathematical Social Sciences, pages 109-118



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