When a worker and firm are matched on the hedonic wage function, it is implied that
A)the worker cannot receive a higher wage at any other firm.
B)the worker-firm match is efficient in the sense that neither the worker nor the firm could become better off with a different match.
C)the firm could increase its profits by offering a safer job as doing so would allow the firm to lower the wage it pays.
D)the hedonic wage function must be very steeply sloped to ensure that the worker doesn't accept a better paying job.
E)the worker receives no surplus from the match.

Question

Quizplus · Accepted Answer

When a worker and firm are matched on the hedonic wage function, it means that the wage and job characteristics offered by the firm are the best match for the worker's preferences and skills, and vice versa. This implies that neither the worker nor the firm could become better off with a different match, making the match efficient. There may still be other firms that offer a higher wage, but they may not offer the same job characteristics that the worker values, so the worker is still better off with the current match. Similarly, the firm could potentially lower the wage if it offered worse job characteristics, but then it may lose the worker to another firm. Thus, the current match is the best possible match for both parties.

When a Worker and Firm Are Matched on the Hedonic