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Truthtelling in Matching Markets

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  • Jeanne Hagenbach
  • Frédéric Koessler
  • Thomas Trégouët

Abstract

We analyze a search and matching model with non‐transferable utility and asymmetric information. Randomly paired agents go through an evaluation phase, at the end of which they discover each other's types and choose to match or not. Before deciding to enter this phase, agents can communicate through cheap talk. We provide conditions for this communication to be informative, and we examine how it affects agents' welfare. We show that communication is Pareto‐improving only when the matching is assortative in the absence of communication and left unchanged by information transmission.

Suggested Citation

  • Jeanne Hagenbach & Frédéric Koessler & Thomas Trégouët, 2017. "Truthtelling in Matching Markets," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(4), pages 882-909, October.
    • Handle: RePEc:bla:scandj:v:119:y:2017:i:4:p:882-909
    DOI: 10.1111/sjoe.12203
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    Cited by:

    1. Paul M. Anglin & Yanmin Gao, 2023. "Value of Communication and Social Media: An Equilibrium Theory of Messaging," The Journal of Real Estate Finance and Economics, Springer, vol. 66(4), pages 861-903, May.

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