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A comment on "salaries or piece rates: on the endogenous matching of harvest workers and crops"

Author

Listed:
  • Silvia Martinez-Gorricho

    (Universidad Católica de la Santísima Concepción)

  • Miguel Sanchez Villalba

    (Universidad de Concepción)

Abstract

In Kandilov and Vukina (2016), the authors conclude that -when agents differ in their ability and principals in the riskiness of their projects- negative assortative matching (NAM) always ensues in equilibrium: good-type (high-ability) agents always match with bad-type (high-risk) principals and vice-versa (p. 78 and 82). We prove that this conclusion is incorrect. We revisit their model and show that positive assortative matching (PAM) always holds in equilibrium by applying standard literature results.

Suggested Citation

  • Silvia Martinez-Gorricho & Miguel Sanchez Villalba, 2021. "A comment on "salaries or piece rates: on the endogenous matching of harvest workers and crops"," Economics Bulletin, AccessEcon, vol. 41(3), pages 1627-1630.
    • Handle: RePEc:ebl:ecbull:eb-21-00065
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I3-P138.pdf
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    References listed on IDEAS

    as
    1. Ivan Kandilov & Tomislav Vukina, 2016. "Salaries Or Piece Rates: On The Endogenous Matching Of Harvest Workers And Crops," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 76-99, January.
    2. Holmstrom, Bengt & Milgrom, Paul, 1987. "Aggregation and Linearity in the Provision of Intertemporal Incentives," Econometrica, Econometric Society, vol. 55(2), pages 303-328, March.
    3. Patrick Legros & Andrew F. Newman, 2002. "Monotone Matching in Perfect and Imperfect Worlds," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(4), pages 925-942.
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    More about this item

    Keywords

    Incentives; Ability; Matching; Moral Hazard;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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