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  3. American Economic Review
  4. February 2012
  5. Contracts versus Salaries in Matching

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Contracts versus Salaries in Matching

  • Federico Echenique
American Economic Review
vol. 102, no. 1, February 2012
(pp. 594–601)
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Abstract

Firms and workers may sign complex contracts that govern many aspects of their interactions. I show that when firms regard contracts as substitutes, bargaining over contracts can be understood as bargaining only over wages. Substitutes is the assumption commonly used to guarantee the existence of stable matchings of workers and firms. (JEL C78, D86, J31, J41)

Citation

Echenique, Federico. 2012. "Contracts versus Salaries in Matching." American Economic Review, 102 (1): 594–601. DOI: 10.1257/aer.102.1.594

JEL Classification

  • C78 Bargaining Theory; Matching Theory
  • D86 Economics of Contract: Theory
  • J31 Wage Level and Structure; Wage Differentials
  • J41 Labor Contracts