Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Campaign
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Working Knowledge
Business Research for Business Leaders
  • Topics
    • Entrepreneurship
    • Finance
    • Gender
    • Globalization
    • Leadership
    • Management
    • Negotiation
    • Social Enterprise
    • Strategy
  • Sections
    • Book
    • Cold Call Podcast
    • Executive Education
    • First Look
    • HBS Case
    • Lessons from the Classroom
    • Op-Ed
    • Research & Ideas
    • Research Event
    • Sharpening Your Skills
    • What Do You Think?
    • Working Paper Summaries
  • Browse All
    • Browse All Articles
    • Popular Articles
    • Cold Call Podcasts
    • About Us
    • Leadership
    • Marketing
    • Finance
    • Management
    • Entrepreneurship
    • All Topics...
    17 Mar 2011Working Paper Summaries

    Marketplace Institutions Related to the Timing of Transactions

    by Alvin E. Roth
    Certain markets face the problem of "unraveling," in which competition for good talent leads a firm to make job offers earlier and earlier, without sufficient knowledge about any given applicant—and in which applicants are forced to decide whether to accept a job before they really know much about working for that firm. Harvard Business School professor Alvin E. Roth discusses how this issue affects the labor markets for new lawyers and gastroenterology fellows, as well as the market for postseason college football bowls. Key concepts include:
    • The market for postseason college bowls is one in which the negative effects of unraveling can be easily quantified: If two teams are matched to play a postseason game before they have finished the regular season, it's possible that one or both will lose some of their remaining regular season games, making the postseason bowl game less attractive to potential TV viewers than it would have been if it had featured more successful teams.
    • Efforts to stop the problem of unraveling in the market for law graduates have generally been unsuccessful, as have attempts to establish uniform dates for recruiting and hiring. This proves that unraveling is a problem even in markets such as law, where salaries are easily adjustable.
    • On the other hand, the market for new medical residents has faced little unraveling ever since that market introduced a stable resident matching system. This negates the idea that rigid pricing is the cause of unraveling, because the medical field generally pays its new residents uniformly across the board.
    LinkedIn
    Email

    Author Abstract

    This paper describes the unraveling of transaction dates in several markets, including the labor markets for new lawyers hired by large law firms and for gastroenterology fellows, and the market for post-season college football bowls. Together these will illustrate that unraveling can occur in markets with competitive prices, that it can result in substantial inefficiencies, and that marketplace institutions play a role in restoring efficiency. I'll conclude with open questions about the role of marketplace institutions and the timing of transactions.

    Paper Information

    • Full Working Paper Text
    • Working Paper Publication Date: November 2010
    • HBS Working Paper Number: 16556
    • Faculty Unit(s): Negotiation, Organizations & Markets
        Trending
          • 18 Feb 2019
          • Book

          What’s Really Disrupting Business? It’s Not Technology

          • 11 Sep 2017
          • Research & Ideas

          Why Employers Favor Men

          • 28 Jan 2019
          • Research & Ideas

          Forget Cash. Here Are Better Ways to Motivate Employees

          • 17 May 2017
          • Research & Ideas

          Minorities Who 'Whiten' Job Resumes Get More Interviews

          • 07 Feb 2019
          • Book

          How Big Companies Can Outrun Disruption

      Alvin E. Roth
      Alvin E. Roth
      George Gund Professor of Economics and Business Administration, Emeritus
      Contact
      Send an email
      → More Articles
      Find Related Articles
      • Strategy
      • Theory

      Sign up for our weekly newsletter

      Interested in improving your business? Learn about fresh research and ideas from Harvard Business School faculty.
      ǁ
      Campus Map
      Campus Map
      Harvard Business School Working Knowledge
      Baker Library | Bloomberg Center
      Soldiers Field
      Boston, MA 02163
      Email: Editor-in-Chief
      →Map & Directions
      →More Contact Information
      • Site Map
      • Jobs
      • Harvard University
      • Trademarks
      • Privacy Policy
      • Terms of Use
      Copyright © President & Fellows of Harvard College
      • Site Map
      • Jobs
      • Harvard University
      • Trademarks
      • Privacy Policy
      • Terms of Use
      Copyright © President & Fellows of Harvard College