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Role of common preferences in the outcome of many-to-many matching

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  • Lee, Joonbae

Abstract

This study analyzes how preference alignment affects outcomes in a many-to-many, anonymous matching market with multiple applications. When all firms rank applicants (workers) by a single, unanimous measure, a high type worker enjoys the freedom of choice at the expense of other low type workers. Instead, if each firm randomly ranks the pool of applicants, a worker’s choice set is restricted to a few firms that value him/her the most. When types are uniformly distributed, the second regime dominates the first both in the average quality of a match and the total number of matches. Therefore, it is possible that a blind policy, which restricts information and increases preference uncertainty, helps improve the efficiency of a matching market.

Suggested Citation

  • Lee, Joonbae, 2022. "Role of common preferences in the outcome of many-to-many matching," Economics Letters, Elsevier, vol. 217(C).
    • Handle: RePEc:eee:ecolet:v:217:y:2022:i:c:s016517652200221x
    DOI: 10.1016/j.econlet.2022.110667
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    References listed on IDEAS

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    1. James Albrecht & Pieter A. Gautier & Susan Vroman, 2006. "Equilibrium Directed Search with Multiple Applications," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(4), pages 869-891.
    2. Albrecht, James & Cai, Xiaoming & Gautier, Pieter & Vroman, Susan, 2020. "Multiple applications, competing mechanisms, and market power," Journal of Economic Theory, Elsevier, vol. 190(C).
    3. Albrecht, James W. & Gautier, Pieter A. & Vroman, Susan B., 2003. "Matching with multiple applications," Economics Letters, Elsevier, vol. 78(1), pages 67-70, January.
    4. Joonbae Lee & Hanna Wang, 2021. "Ranking and Search Effort in Matching," Working Papers 1242, Barcelona School of Economics.
    5. Philipp Kircher, 2009. "Efficiency of Simultaneous Search," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 861-913, October.
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    8. James Albrecht, Pieter Gautier, & Susan Vroman, 2003. "Matching with Multiple Applications: The Limiting Case," Working Papers gueconwpa~03-03-25, Georgetown University, Department of Economics.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Ranking and matching; Matching with multiple applications; Blind policy; Simultaneous search;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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