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Two-Sided Matching with Endogenous Preferences

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  • Yair Antler

Abstract

We modify the stable matching problem by allowing agents' preferences to depend on the endogenous actions of agents on the other side of the market. Conventional matching theory results break down in the modified setup. In particular, every game that is induced by a stable matching mechanism (e.g., the Gale-Shapley mechanism) may have equilibria that result in matchings that are not stable with respect to the agents' endogenous preferences. However, when the Gale-Shapley mechanism is slightly modified, every equilibrium of its induced game results in a pairwise stable matching with respect to the endogenous preferences as long as they satisfy a natural reciprocity property. (JEL C78, D82)

Suggested Citation

  • Yair Antler, 2015. "Two-Sided Matching with Endogenous Preferences," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 241-258, August.
  • Handle: RePEc:aea:aejmic:v:7:y:2015:i:3:p:241-58
    Note: DOI: 10.1257/mic.20130272
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    Citations

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    Cited by:

    1. Bierbrauer, Felix & Netzer, Nick, 2016. "Mechanism design and intentions," Journal of Economic Theory, Elsevier, vol. 163(C), pages 557-603.
    2. Ahamad, Mazbahul, 2016. "Envious Preferences in Two-sided Matching," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235482, Agricultural and Applied Economics Association.
    3. Antler, Y, 2016. "No One Likes to Be Second Choice," Economics Discussion Papers 17510, University of Essex, Department of Economics.

    More about this item

    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

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