A comment on "salaries or piece rates: on the endogenous matching of harvest workers and crops"

Abstract

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.