Matching through position auctions
AbstractUsing a mechanism design framework, we characterize how a profit-maximizing intermediary can design matching markets when each agent is privately informed about his quality as a partner. Sufficient conditions are provided that ensure a version of positive assortative matching (what we call truncated positive assortative matching) maximizes profits. Under these conditions, all-pay position auctions always implement the profit-maximizing allocation. Winners-pay position auctions, however, only do so in sufficiently large markets.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 148 (2013)
Issue (Month): 4 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622869
Matching; Auctions; Mechanism design; Intermediation;
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
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