CV:Upload/File/2018/10/20181024041909534.pdf

Abstract:In a Kelso-Crawford job market framework, we consider arbitrary constraints on the sets of doctors that hospitals can hire. Constraints preserve the substitutes condition if and only if they are generalized interval constraints. When doctors are gross substitutes, competitive equilibria always exist under mild assumptions unless the government imposes other types of constraints. Competitive equilibrium allocations of a market under interval constraints are also those of an unconstrained market with a certain government transfer policy. For markets with interval constraints and beyond, new techniques help demonstrate comparative statics.