TY  - JOUR
AU  - McKinney,C. Nicholas
AU  - Niederle,Muriel
AU  - Roth,Alvin E.
TI  - The collapse of a medical clearinghouse (and why such failures are rare)
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9467
PY  - 2003
Y2  - February 2003
UR  - http://www.nber.org/papers/w9467
L1  - http://www.nber.org/papers/w9467.pdf
N1  - Author contact info:
Muriel Niederle
Department of Economics
579 Serra Mall
Stanford University
Stanford, CA 94305-6072
Tel: 650/723-7359
Fax: 650/725-5702
E-Mail: niederle@stanford.edu

Alvin E. Roth
Department of Economics
Stanford University
579 Serra Mall
Stanford, CA 94305
Tel: 650/725-9147
E-Mail: alroth@stanford.edu
AB  - The collapse of the clearinghouse for the entry-level gastroenterology labor market offers a unique opportunity to study how stable clearinghouses succeed and fail. To explore the reasons for the failure of the clearinghouse (and why failures of this kind of clearinghouse have been so rare), we conduct an experimental investigation of demand shocks of the kind that occurred in the gastroenterology market. We find that a reduction in demand for positions leads to the collapse of the match only when it is detectable by firms before being detected by workers (as in the unexpected shock that took place in 1996, which could be seen by firms in their reduced applicant pools). Simple demand and supply imbalances do not seem to interfere with the operation of the centralized match. Our results suggest an affirmative answer to the question posed by market participants about whether the clearinghouse could be successfully restarted, and that this would relieve some of the distress now reported in that market, by allowing it to operate later, at a more uniform time, and with more national scope.
ER  -