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On Human Capital and Team Stability

Chiappori, Pierre A.; Galichon, Alfred; Salanie, Bernard

In many economic contexts, agents from a same population team up to better exploit their human capital. In such contexts (often called “roommate matching problems”), stable matchings may fail to exist even when utility is transferable. We show that when each individual has a close substitute, a stable matching can be implemented with minimal policy intervention. Our results shed light on the stability of partnerships on the labor market. Moreover, they imply that the tools crafted in empirical studies of the marriage problem can easily be adapted to many roommate problems.

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More About This Work

Academic Units
Economics
Publisher
Department of Economics, Columbia University
Series
Department of Economics Discussion Papers, 1213-09
Published Here
November 7, 2012

Notes

Updated 2016—This paper builds on material from an unpublished manuscript circulated under the name “The Roommate Problem Is More Stable Than You Think,” which is now obsolete.

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