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Silvia Martinez-Gorricho and Miguel Sanchez Villalba
''A comment on "salaries or piece rates: on the endogenous matching of harvest workers and crops"''
( 2021, Vol. 41 No.3 )
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.
Keywords: Incentives, Ability, Matching, Moral Hazard.
JEL: D8 - Information, Knowledge, and Uncertainty: General
C7 - Game Theory and Bargaining Theory
Manuscript Received : Jan 18 2021 Manuscript Accepted : Sep 17 2021

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