IDEAS home Printed from https://ideas.repec.org/a/ecm/emetrp/v75y2007i4p1073-1102.html
   My bibliography  Save this article

Beauty Is a Beast, Frog Is a Prince: Assortative Matching with Nontransferabilities

Author

Listed:
  • Patrick Legros
  • Andrew F. Newman

Abstract

We present sufficient conditions for monotone matching in environments where utility is not fully transferable between partners. These conditions involve not only complementarity in types of the total payoff to a match, as in the transferable utility case, but also monotonicity in type of the degree of transferability between partners. We apply our conditions to study some models of risk sharing and incentive problems, deriving new results for predicted matching patterns in those contexts. Copyright The Econometric Society 2007.

Suggested Citation

  • Patrick Legros & Andrew F. Newman, 2007. "Beauty Is a Beast, Frog Is a Prince: Assortative Matching with Nontransferabilities," Econometrica, Econometric Society, vol. 75(4), pages 1073-1102, July.
    • Handle: RePEc:ecm:emetrp:v:75:y:2007:i:4:p:1073-1102
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/j.1468-0262.2007.00782.x
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June.
    2. Daniel A. Ackerberg & Maristella Botticini, 2002. "Endogenous Matching and the Empirical Determinants of Contract Form," Journal of Political Economy, University of Chicago Press, vol. 110(3), pages 564-591, June.
    3. Clark Simon, 2006. "The Uniqueness of Stable Matchings," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 6(1), pages 1-28, December.
    4. Jewitt, Ian, 1988. "Justifying the First-Order Approach to Principal-Agent Problems," Econometrica, Econometric Society, vol. 56(5), pages 1177-1190, September.
    5. Patrick Legros & Andrew F. Newman, 2008. "Competing for Ownership," Journal of the European Economic Association, MIT Press, vol. 6(6), pages 1279-1308, December.
    6. Kaneko, Mamoru, 1982. "The central assignment game and the assignment markets," Journal of Mathematical Economics, Elsevier, vol. 10(2-3), pages 205-232, September.
    7. Donald J. Wright, 2004. "The Risk and Incentives Trade-off in the Presence of Heterogeneous Managers," Journal of Economics, Springer, vol. 83(3), pages 209-223, December.
    8. Chiappori, Pierre-André & Reny, Philip J., 2016. "Matching to share risk," Theoretical Economics, Econometric Society, vol. 11(1), January.
    9. Serfes, Konstantinos, 2005. "Risk sharing vs. incentives: Contract design under two-sided heterogeneity," Economics Letters, Elsevier, vol. 88(3), pages 343-349, September.
    10. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
    11. Lones Smith, 2006. "The Marriage Model with Search Frictions," Journal of Political Economy, University of Chicago Press, vol. 114(6), pages 1124-1146, December.
    12. Joseph Farrell & Suzanne Scotchmer, 1988. "Partnerships," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(2), pages 279-297.
    13. Pierre André Chiappori & Bernard Salanié, 2002. "Testing Contract Theory: A Survey of Some Recent Work," CESifo Working Paper Series 738, CESifo.
    14. Newman, Andrew F., 2007. "Risk-bearing and entrepreneurship," Journal of Economic Theory, Elsevier, vol. 137(1), pages 11-26, November.
    15. Roth, Alvin E. & Sotomayor, Marilda, 1992. "Two-sided matching," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 16, pages 485-541, Elsevier.
    16. Milgrom, Paul & Shannon, Chris, 1994. "Monotone Comparative Statics," Econometrica, Econometric Society, vol. 62(1), pages 157-180, January.
    17. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-846, July-Aug..
    18. Eeckhout, Jan, 2000. "On the uniqueness of stable marriage matchings," Economics Letters, Elsevier, vol. 69(1), pages 1-8, October.
    19. Simon Clark, 2002. "Uniqueness of Equilibrium in Two-sided Matching," Edinburgh School of Economics Discussion Paper Series 84, Edinburgh School of Economics, University of Edinburgh.
    20. Patrick Legros & Andrew F. Newman, 2002. "Monotone Matching in Perfect and Imperfect Worlds," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(4), pages 925-942.
    21. Kaneko, Mamoru & Wooders, Myrna Holtz, 1996. "The Nonemptiness of the f-Core of a Game without Side Payments," International Journal of Game Theory, Springer;Game Theory Society, vol. 25(2), pages 245-258.
    22. Rosenzweig, Mark R & Stark, Oded, 1989. "Consumption Smoothing, Migration, and Marriage: Evidence from Rural India," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 905-926, August.
    23. Holmstrom, Bengt & Milgrom, Paul, 1987. "Aggregation and Linearity in the Provision of Intertemporal Incentives," Econometrica, Econometric Society, vol. 55(2), pages 303-328, March.
    24. Canice Prendergast, 2002. "The Tenuous Trade-off between Risk and Incentives," Journal of Political Economy, University of Chicago Press, vol. 110(5), pages 1071-1102, October.
    25. Bernard Salanié, 2003. "Testing Contract Theory," CESifo Economic Studies, CESifo, vol. 49(3), pages 461-477.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Patrick Legros & Andrew Newman, 2007. "Beauty is a beast, frog is a prince :assortative matching in a nontransferable world," ULB Institutional Repository 2013/7022, ULB -- Universite Libre de Bruxelles.
    2. Newman, Andrew, 2002. "Assortative Matching in a Non-transferable World," CEPR Discussion Papers 3469, C.E.P.R. Discussion Papers.
    3. Courty, Pascal & Marschke, Gerald, 2008. "On the Sorting of Physicians across Medical Occupations," IZA Discussion Papers 3862, Institute of Labor Economics (IZA).
    4. Inés Macho-Stadler & David Pérez-Castrillo, 2021. "Agency theory meets matching theory," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(1), pages 1-33, March.
    5. Inés Macho-Stadler & David Pérez-Castrillo, 2018. "Moral hazard: Base models and two extensions," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume I, chapter 16, pages 453-485, Edward Elgar Publishing.
    6. Ayça Kaya & Galina Vereshchagina, 2015. "Moral hazard and sorting in a market for partnerships," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 60(1), pages 73-121, September.
    7. Committee, Nobel Prize, 2016. "Oliver Hart and Bengt Holmström: Contract Theory," Nobel Prize in Economics documents 2016-1, Nobel Prize Committee.
    8. Hector Chade & Jan Eeckhout & Lones Smith, 2017. "Sorting through Search and Matching Models in Economics," Journal of Economic Literature, American Economic Association, vol. 55(2), pages 493-544, June.
    9. Eduard Alonso-Paulí & David Pérez-Castrillo, 2012. "Codes of Best Practice in competitive markets for managers," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 49(1), pages 113-141, January.
    10. Andrew F. Newman & Patrick Legros, 2011. "Incomplete Contracts and Industrial Organization: A Survey," Boston University - Department of Economics - Working Papers Series WP2011-036, Boston University - Department of Economics.
    11. Sperisen, Benjamin & Wiseman, Thomas, 2020. "Too good to fire: Non-assortative matching to play a dynamic game," Games and Economic Behavior, Elsevier, vol. 124(C), pages 491-511.
    12. Laurens Cherchye & Thomas Demuynck & Bram De Rock & Frederic Vermeulen, 2017. "Household Consumption When the Marriage Is Stable," American Economic Review, American Economic Association, vol. 107(6), pages 1507-1534, June.
    13. Marco A. Marini & Paolo Polidori & Désirée Teobaldelli & Davide Ticchi, 2018. "Optimal Incentives in a Principal–Agent Model with Endogenous Technology," Games, MDPI, vol. 9(1), pages 1-13, February.
    14. Axel Anderson & Lones Smith, 2024. "The Comparative Statics of Sorting," American Economic Review, American Economic Association, vol. 114(3), pages 709-751, March.
    15. Silvia Martinez-Gorricho & Miguel Sanchez Villalba, 2021. "Incentives, ability and disutility of effort," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(3), pages 453-487, September.
    16. Maitreesh Ghatak & Alexander Karaivanov, 2011. "Contractual Structure and Endogenous Matching in Partnershipso," STICERD - Economic Organisation and Public Policy Discussion Papers Series 024, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    17. Ghatak, Maitreesh & Karaivanov, Alexander, 2014. "Contractual structure in agriculture with endogenous matching," Journal of Development Economics, Elsevier, vol. 110(C), pages 239-249.
    18. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2011. "Field Experiments with Firms," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 63-82, Summer.
    19. Grund, Christian & Sliwka, Dirk, 2006. "Performance Pay and Risk Aversion," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 101, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    20. Serfes, Konstantinos, 2005. "Risk sharing vs. incentives: Contract design under two-sided heterogeneity," Economics Letters, Elsevier, vol. 88(3), pages 343-349, September.

    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

    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:ecm:emetrp:v:75:y:2007:i:4:p:1073-1102. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/essssea.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.