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Matching and price competition: beyond symmetric linear costs

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  • Julio González-Díaz
  • Ron Siegel

Abstract

Bulow and Levin’s ( 2006 ) “Matching and Price Competition” studies a matching model in which hospitals compete for interns by offering wages. We relax the assumption of symmetric linear costs and compare the pricing equilibrium that results to the firm-optimal competitive equilibrium. With linear and asymmetric costs, competition in the pricing equilibrium may not be localized, but all other qualitative comparisons of Bulow and Levin ( 2006 ) hold. With non-linear and symmetric costs workers’ average utility in the pricing equilibrium may be higher than in the firm- optimal competitive equilibrium. With asymmetric and non-linear costs, firms need not choose scores from an interval in a pricing equilibrium, which may make competition even less localized. Copyright Springer-Verlag 2013

Suggested Citation

  • Julio González-Díaz & Ron Siegel, 2013. "Matching and price competition: beyond symmetric linear costs," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(4), pages 835-844, November.
    • Handle: RePEc:spr:jogath:v:42:y:2013:i:4:p:835-844
    DOI: 10.1007/s00182-012-0325-y
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    References listed on IDEAS

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    1. Fuhito Kojima, 2007. "Matching and Price Competition: Comment," American Economic Review, American Economic Association, vol. 97(3), pages 1027-1031, June.
    2. Ron Siegel, 2009. "All-Pay Contests," Econometrica, Econometric Society, vol. 77(1), pages 71-92, January.
    3. Ron Siegel, 2010. "Asymmetric Contests with Conditional Investments," American Economic Review, American Economic Association, vol. 100(5), pages 2230-2260, December.
    4. Jeremy Bulow & Jonathan Levin, 2006. "Matching and Price Competition," American Economic Review, American Economic Association, vol. 96(3), pages 652-668, June.
    5. Barut, Yasar & Kovenock, Dan, 1998. "The symmetric multiple prize all-pay auction with complete information," European Journal of Political Economy, Elsevier, vol. 14(4), pages 627-644, November.
    6. Georgy Artemov, 2008. "Matching and price competition: would personalized prices help?," International Journal of Game Theory, Springer;Game Theory Society, vol. 36(3), pages 321-331, March.
    7. Jun Xiao, 2012. "Asymmetric All-Pay Contests with Heterogeneous," Department of Economics - Working Papers Series 1151, The University of Melbourne.
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    Cited by:

    1. Xiao, Jun, 2018. "All-pay contests with performance spillovers," Mathematical Social Sciences, Elsevier, vol. 92(C), pages 35-39.
    2. Chen Cohen & David Lagziel & Ofer Levi & Aner Sela, 2020. "All-Pay Auctions With Heterogeneous Prizes And Partially Asymmetric Players," Working Papers 2010, Ben-Gurion University of the Negev, Department of Economics.
    3. Xiao, Jun, 2023. "Ability grouping in contests," Journal of Mathematical Economics, Elsevier, vol. 104(C).
    4. Chen Cohen & Ishay Rabi & Aner Sela, 2022. "Assortative Matching by Lottery Contests," Games, MDPI, vol. 13(5), pages 1-20, September.
    5. Cohen, Chen & Lagziel, David & Levi, Ofer & Sela, Aner, 2023. "The role of the second prize in all-pay auctions with two heterogeneous prizes," Journal of Mathematical Economics, Elsevier, vol. 105(C).
    6. Boosey Luke A., 2016. "Competition in a Posted-Salary Matching Market under Private Information," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 16(2), pages 599-631, June.
    7. Xiao, Jun, 2016. "Asymmetric all-pay contests with heterogeneous prizes," Journal of Economic Theory, Elsevier, vol. 163(C), pages 178-221.

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