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Suppose that side on this platform are firms and side are workers. Firms can be either high productivity or low productivity . Workers can be
Suppose that side on this platform are firms and side are workers. Firms can be either high productivity or low productivity . Workers can be either high productivity or low productivity . There are firms and workers. Firms and workers are equally likely to be high or low types, but the platform cannot observe their types. Assume that > > > > 1. If a firm and worker are matched then surplus is generated. (b) If these parties are matched randomly in the marketplace (i.e., each firm of the firms is randomly matched with one of the workers), how much total surplus is generated in expectation? (hint: there are N/2 high type firms who are randomly matched with workers)
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