Assignment Games with Externalities And Matching-Based Competition
AbstractWe develop a model of assignment games with pairwise-identity-dependent externalities. A concept of conjectural equilibrium is proposed, and the universal conjecture is shown to be the necessary and sufficient condition for the general existence of equilibrium. We then apply the solution concept to a matching-based Cournot model in which the unit production cost of a firm depends on both the technology of the firm and the human capital of the manager hired, and show that if technology and human capital are complementary, the positive assortative matching (PAM) is a stable matching under rational expectations, or even if firm technology and human capital are substitutable yet the substitutive effect is dominated by the marginal effects of technology and human capital, the PAM is still a rational stable matching.However, if the substitutive effect on the unit production cost is sufficiently strong or the market demand is sufficiently high, the negative assortative matching is a rational stable matching.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse08_2013.
Date of creation: Oct 2013
Date of revision:
Contact details of provider:
Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 6884
Web page: http://www.bgse.uni-bonn.de
Cooperative Games; Two-sided Matching; Assignment Games; Externalities; Transferable Utility; Cournot Competition;
Find related papers by JEL classification:
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D47 - Microeconomics - - Market Structure and Pricing - - - Market Design
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-06-04 (All new papers)
- NEP-CBE-2013-06-04 (Cognitive & Behavioural Economics)
- NEP-EXP-2013-06-04 (Experimental Economics)
- NEP-PUB-2013-06-04 (Public Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
- David P. Baron, 2001. "Private Politics, Corporate Social Responsibility, and Integrated Strategy," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(1), pages 7-45, 03.
- Glazer, Amihai & Konrad, Kai A, 1996. "A Signaling Explanation for Charity," American Economic Review, American Economic Association, vol. 86(4), pages 1019-28, September.
- Daniel W. Elfenbein & Ray Fisman & Brian Mcmanus, 2012. "Charity as a Substitute for Reputation: Evidence from an Online Marketplace," Review of Economic Studies, Oxford University Press, vol. 79(4), pages 1441-1468.
- Jehiel, Philippe & Meyer-Ter-Vehn, Moritz & Moldovanu, Benny, 2006.
"Mixed Bundling Auctions,"
CEPR Discussion Papers
5566, C.E.P.R. Discussion Papers.
- Philippe Jehiel & Moritz Meyer-Ter-Vehn & Benny Moldovanu, 2006. "Mixed Bundling Auctions," Levine's Bibliography 122247000000001123, UCLA Department of Economics.
- Jehiel, Philippe & Meyer-ter-Vehn, Moritz & Moldovanu, Benny, 2006. "Mixed Bundling Auctions," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 141, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Traxler, Christian & Winter, Joachim, 2012.
"Survey evidence on conditional norm enforcement,"
Munich Reprints in Economics
19645, University of Munich, Department of Economics.
- Christian Traxler & Joachim Winter, 2009. "Survey Evidence on Conditional Norm Enforcement," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2009_03, Max Planck Institute for Research on Collective Goods.
- Traxler, Christian & Winter, Joachim, 2009. "Survey Evidence on Conditional Norm Enforcement," Discussion Papers in Economics 8992, University of Munich, Department of Economics.
- Geoffrey Heal, 2003. "Bundling Biodiversity," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 553-560, 04/05.
- Thomas Bue Bjorner & Lars Garn Hansen & Clifford S. Russell, 2002.
"Environmental Labelling and Consumer's Choice - An Empirical Analysis of the Effect of the Nordic Swan,"
Vanderbilt University Department of Economics Working Papers
0203, Vanderbilt University Department of Economics.
- Bjorner, Thomas Bue & Hansen, L.G.Lars Garn & Russell, Clifford S., 2004. "Environmental labeling and consumers' choice--an empirical analysis of the effect of the Nordic Swan," Journal of Environmental Economics and Management, Elsevier, vol. 47(3), pages 411-434, May.
- Bateman, Ian J, et al, 1997. "Does Part-Whole Bias Exist? An Experimental Investigation," Economic Journal, Royal Economic Society, vol. 107(441), pages 322-32, March.
- Armin Falk & Florian Zimmermann, 2011.
"Preferences for Consistency,"
CESifo Working Paper Series
3528, CESifo Group Munich.
- John R. Hamman & George Loewenstein & Roberto A. Weber, 2010. "Self-Interest through Delegation: An Additional Rationale for the Principal-Agent Relationship," American Economic Review, American Economic Association, vol. 100(4), pages 1826-46, September.
- Donald S. Siegel & Donald F. Vitaliano, 2006.
"An Empirical Analysis of the Strategic Use of Corporate Social Responsibility,"
Rensselaer Working Papers in Economics
0602, Rensselaer Polytechnic Institute, Department of Economics.
- Donald S. Siegel & Donald F. Vitaliano, 2007. "An Empirical Analysis of the Strategic Use of Corporate Social Responsibility," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(3), pages 773-792, 09.
- Dirk Engelmann & Alistair Munro & Marieta Valente, 2011.
"On the behavioural relevance of optional and mandatory impure public goods: results from a laboratory experiment,"
NIMA Working Papers
45, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
- Dirk Engelmann & Alistair Munro & Marieta Valente, 2012. "On the behavioural relevance of optional and mandatory impure public goods: results from a laboratory experiment," GRIPS Discussion Papers 11-17, National Graduate Institute for Policy Studies.
- Amos Tversky & Daniel Kahneman, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Levine's Working Paper Archive
7656, David K. Levine.
- Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
- Dan Ariely & Anat Bracha & Stephan Meier, 2009.
"Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially,"
American Economic Review,
American Economic Association, vol. 99(1), pages 544-55, March.
- Ariely, Dan & Bracha, Anat & Meier, Stephan, 2007. "Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially," IZA Discussion Papers 2968, Institute for the Study of Labor (IZA).
- Dan Ariely & Anat Bracha & Stephan Meier, 2007. "Doing good or doing well? Image motivation and monetary incentives in behaving prosocially," Working Papers 07-9, Federal Reserve Bank of Boston.
- John Vickers & Mark Armstrong, 2006.
"Competitive Nonlinear Pricing and Bundling,"
Economics Series Working Papers
281, University of Oxford, Department of Economics.
- Scott I. Rick & Cynthia E. Cryder & George Loewenstein, 2008. "Tightwads and Spendthrifts," Journal of Consumer Research, University of Chicago Press, vol. 34(6), pages 767-782, October.
- Adams, William James & Yellen, Janet L, 1976. "Commodity Bundling and the Burden of Monopoly," The Quarterly Journal of Economics, MIT Press, vol. 90(3), pages 475-98, August.
- Emir Kamenica, 2008. "Contextual Inference in Markets: On the Informational Content of Product Lines," American Economic Review, American Economic Association, vol. 98(5), pages 2127-49, December.
- Kjell Arne Brekke & Snorre Kverndokk & Karinen Nyborg, 2000.
"An Economic Model of Moral Motivation,"
290, Research Department of Statistics Norway.
- Yadav, Manjit S, 1994. " How Buyers Evaluate Product Bundles: A Model of Anchoring and Adjustment," Journal of Consumer Research, University of Chicago Press, vol. 21(2), pages 342-53, September.
- Popkowski Leszczyc, Peter T.L. & Pracejus, John W. & Shen, Yingtao, 2008. "Why more can be less: An inference-based explanation for hyper-subadditivity in bundle valuation," Organizational Behavior and Human Decision Processes, Elsevier, vol. 105(2), pages 233-246, March.
- Johnson, Eric J, et al, 1993. " Framing, Probability Distortions, and Insurance Decisions," Journal of Risk and Uncertainty, Springer, vol. 7(1), pages 35-51, August.
- Bernasconi, Michele & Corazzini, Luca & Kube, Sebastian & Maréchal, Michel André, 2009.
"Two are better than one!: Individuals' contributions to "unpacked" public goods,"
Elsevier, vol. 104(1), pages 31-33, July.
- Michele Bernasconi, Luca Corazzini, Sebastian Kube, Michel André Maréchal., 2007. "Two are Better Than One! Individuals' Contributions to "Unpacked" Public Goods," ISLA Working Papers 30, ISLA, Centre for research on Latin American Studies and Transition Economies, Universita' Bocconi, Milano, Italy.
- Strahilevitz, Michal & Myers, John G, 1998. " Donations to Charity as Purchase Incentives: How Well They Work May Depend on What You Are Trying to Sell," Journal of Consumer Research, University of Chicago Press, vol. 24(4), pages 434-46, March.
- Richard H. Thaler & Shlomo Benartzi, 2001. "Naive Diversification Strategies in Defined Contribution Saving Plans," American Economic Review, American Economic Association, vol. 91(1), pages 79-98, March.
- Jana Friedrichsen & Dirk Engelmann, 2013.
"Who Cares for Social Image? Interactions between Intrinsic Motivation and Social Image Concerns,"
CESifo Working Paper Series
4514, CESifo Group Munich.
- Friedrichsen, Jana & Engelmann, Dirk, 2013. "Who cares for social image? Interactions between intrinsic motivation and social image concerns," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79746, Verein für Socialpolitik / German Economic Association.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (BGSE Office).
If references are entirely missing, you can add them using this form.