\( \definecolor{cornellred}{RGB}{179,27,27} \newcommand{\cred}[1]{\textcolor{cornellred}{#1}} \newcommand{\tcred}[1]{\textcolor{cornellred}{\textrm{#1}}} \)

The Model

$L$ workers match with $F$ firms. Each worker can match with at most one firm. Each firm can match with at most one worker.

$\cred{\mathcal L}$Workers $\cred{w}$Wage of worker $l$
$\cred{\mathcal F}$Firms $\cred{\pi_f}$Profit of firm $f$
$\cred{v_{lf}}$Surplus from matching
worker $l$ with firm $f$
  $\cred{x}$ A matching. $x_{lf}$ is 1 if $l$ is matched with $f$, 0 otherwise