Matching with Contracts: An Efficient Marriage Market?
AbstractThis paper studies a marriage market with two-sided information asymmetry in whichthe gains from marriage are stochastic. Contracts specify divisions of ex-post realizedmarital surplus. I first study a game in which one side of the matching market offerscontracts. I show that when expected marital surplus is strictly monotonic in agentsâ€™types, no separating equilibrium that achieves matching efficiency exists. I then studya social plannerâ€™s problem, finding necessary and sufficient conditions for a truthful directrevelation mechanism to achieve matching efficiency. These conditions become morestringent as the number of agents in the matching market increases.
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Bibliographic InfoPaper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 630.
Date of creation: 26 Nov 2012
Date of revision:
Matching; two-sided information asymmetry; endogenous sharing rule; marriage market; stochastic marital surplus;
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-02-03 (All new papers)
- NEP-CTA-2013-02-03 (Contract Theory & Applications)
- NEP-DEM-2013-02-03 (Demographic Economics)
- NEP-GTH-2013-02-03 (Game Theory)
- NEP-MIC-2013-02-03 (Microeconomics)
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.:
- Eugene Choo & Aloysius Siow, 2006. "Who Marries Whom and Why," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 175-201, February.
- Damiano, Ettore & Li, Hao, 2005.
"Price Discrimination and Efficient Matching,"
Microeconomics.ca working papers
damiano-05-03-21-12-21-58, Vancouver School of Economics, revised 22 Mar 2005.
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