We study a matching model with salaries in which firms face budget constraints. Due to budget constraints, the existence of a stable matching is not guaranteed. We show that if workers are homogeneous, from the firms' point of view, then a weak stable matching always exists; furthermore, when a...

Each year, over a hundred thousand defendants who are too poor to pay for a lawyer are assigned counsel. Existing procedures for making such assignments are essentially random and have been criticized for giving indigent defendants no say in choosing the counsel they are assigned to. In this...

We study a one-to-one two-sided matching market in which each man has a common value for all women and a private value specific to each woman. We introduce a new mechanism, called a proposing mechanism, which is a novel interpretation of the deferred acceptance mechanism. We show that these...

A classic question in economics is the welfare consequences of different allocations of heterogeneous workers to heterogeneous firms. Welfare is unobservable because the cost of providing labor to the workers is unobservable. Many researchers use GDP instead of the total surplus as a proxy for...

The effect of sorting students based on their academic performances depends not only on direct peer effects but also on indirect peer effects through teachers' efforts. Standard assumptions in the literature are insufficient to determine the effect of sorting on the performances of students and...

Stable mechanisms are not immune to manipulation in matching markets; however, they work well in practice. We study the college admission problem where colleges have completely heterogeneous preferences and can under-report their capacities. Assuming there is a continuum of students, we use a...