| By: |
Ulrich Schetter (Center for International Development at Harvard University);
Oriol Tejada |
| Abstract: |
We analyze how globalization affects the allocation of talent across competing
teams in large matching markets. Assuming a reduced form of globalization as a
convex transformation of payoffs, we show that for every economy where
positive assortative matching is an equilibrium without globalization, it is
also an equilibrium with globalization. Moreover, for some economies positive
assortative matching is an equilibrium with globalization but not without. The
result that globalization promotes the concentration of talent holds under
very minimal restrictions on how individual skills translate into team skills
and on how team skills translate into competition outcomes. Our analysis
covers many interesting special cases, including simple extensions of Rosen
(1981) and Melitz (2003) with competing teams. |
| Keywords: |
competing teams, globalization, inequality, matching |
| JEL: |
C78 D3 D4 F61 F66 |
| Date: |
2019–12 |
| URL: |
http://d.repec.org/n?u=RePEc:cid:wpfacu:121a&r=all |