Competitive Many-to-One Matching: Sorting vs. Equality (opens in new tab)

We study many-to-one matching with transfers and peer effects, such as matching workers to firms, students to schools, residents to neighborhoods, or consumers to status goods. With flexible prices (as in the labor market), competitive equilibrium exists and is efficient under general conditions. We characterize when workforces are segregated by skill and matched to firms in a positively assortative manner. In general, equilibrium features alter...