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Stable Matching with Incomplete Information, Second Version

Author

Listed:
  • Qingmin Liu

    (Department of Economics, Columbia University)

  • George J. Mailath

    (Department of Economics, University of Pennsylvania)

  • Andrew Postlewaite

    (Department of Economics, University of Pennsylvania)

  • Larry Samuelson

    (Department of Economics, Yale University)

Abstract

We formulate a notion of stable outcomes in matching problems with one-sided asymmetric information. The key conceptual problem is to formulate a notion of a blocking pair that takes account of the inferences that the uninformed agent might make from the hypothesis that the current allocation is stable. We show that the set of stable outcomes is nonempty in incomplete information environments, and is a superset of the set of complete-information stable outcomes. We then provide sufficient conditions for incomplete-information stable matchings to be efficient. Lastly, we define a notion of price sustainable allocations and show that the set of incomplete- information stable matchings is a subset of the set of such allocations.

Suggested Citation

  • Qingmin Liu & George J. Mailath & Andrew Postlewaite & Larry Samuelson, 2010. "Stable Matching with Incomplete Information, Second Version," PIER Working Paper Archive 12-042, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 28 Oct 2012.
    • Handle: RePEc:pen:papers:12-042
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Matching; Stability; Stable outcome; Incomplete information; Core;
    All these keywords.

    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
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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