IDEAS home Printed from https://ideas.repec.org/a/aea/aejmic/v10y2018i3p86-123.html
   My bibliography  Save this article

Two-Sided Investment and Matching with Multidimensional Cost Types and Attributes

Author

Listed:
  • Deniz Dizdar

Abstract

Heterogeneous buyers and sellers must make investments before entering a continuum assignment market. I show that efficient ex post contracting equilibria (Cole, Mailath and Postlewaite 2001b) exist in a general assignment game framework. I then shed light on what enables and what precludes coordination failures. A simple condition, absence of technological multiplicity, guarantees efficient investments for each pair, but a mismatch of agents may still occur. However, using optimal transport theory, I also show that mismatch is heavily constrained in certain multi-dimensional environments with differentiated agents and no technological multiplicity. Under technological multiplicity, even extreme ex ante heterogeneity need not preclude inefficiencies.

Suggested Citation

  • Deniz Dizdar, 2018. "Two-Sided Investment and Matching with Multidimensional Cost Types and Attributes," American Economic Journal: Microeconomics, American Economic Association, vol. 10(3), pages 86-123, August.
    • Handle: RePEc:aea:aejmic:v:10:y:2018:i:3:p:86-123
    Note: DOI: 10.1257/mic.20150147
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/mic.20150147
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/attachments?retrieve=TNKIH9aqRpMxyDwCpKlD5zEnSCAmZh5C
    Download Restriction: no
    File URL: https://www.aeaweb.org/articles/attachments?retrieve=jXYu7YyY_I5QHume2omQ_o1Qlh8tFEnW
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Deniz Dizdar & Benny Moldovanu & Nora Szech, 2017. "The Multiplier Effect in Two-Sided Markets with Bilateral Investments," CESifo Working Paper Series 6803, CESifo.
    2. Jerez, Belén, 2017. "Competitive search equilibrium with multidimensional heterogeneity and two-sided ex-ante investments," Journal of Economic Theory, Elsevier, vol. 172(C), pages 202-219.
    3. Georg Nöldeke & Larry Samuelson, 2015. "Investment and Competitive Matching," Econometrica, Econometric Society, vol. 83(3), pages 835-896, May.
    4. Dizdar, Deniz & Moldovanu, Benny & Szech, Nora, 2019. "The feedback effect in two-sided markets with bilateral investments," Journal of Economic Theory, Elsevier, vol. 182(C), pages 106-142.
    5. Elliott, M. & Talamàs, E., 2020. "Bargaining Foundations for Price Taking in Matching Markets," Cambridge Working Papers in Economics 2070, Faculty of Economics, University of Cambridge.
    6. Michael Greinecker & Christopher Kah, 2021. "Pairwise Stable Matching in Large Economies," Econometrica, Econometric Society, vol. 89(6), pages 2929-2974, November.
    7. Zhang, Hanzhe, 2020. "Pre-matching gambles," Games and Economic Behavior, Elsevier, vol. 121(C), pages 76-89.
    8. Thomas Gall, 2017. "Surplus efficiency of ex ante investments in matching markets with nontransferabilities," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(1), pages 51-78, March.
    9. Seungjin Han, 2019. "Pre-Match Investment Competition with Bounded Transfers," Department of Economics Working Papers 2019-01, McMaster University.

    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejmic:v:10:y:2018:i:3:p:86-123. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.