Matching Networks with Bilateral Contracts
AbstractWe introduce a model in which firms trade goods via bilateral contracts which specify a buyer, a seller, and the terms of the exchange. This setting subsumes (many-to- many) matching with contracts, as well as supply chain matching. When firms' relationships do not exhibit a supply chain structure, stable allocations need not exist. By contrast, in the presence of supply chain structure, a natural substitutability condition characterizes the maximal domain of firm preferences for which stable allocations always exist. Furthermore, the classical lattice structure, rural hospitals theorem, and one-sided strategy-proofness results all generalize to this setting.
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Bibliographic InfoPaper provided by Stanford University, Graduate School of Business in its series Research Papers with number 2050.
Date of creation: Feb 2010
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-04 (All new papers)
- NEP-GTH-2010-06-04 (Game Theory)
- NEP-MIC-2010-06-04 (Microeconomics)
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