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Matching with contracts, substitutes and two-unit demand

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  • Tello, Benjamín

Abstract

In the context of many-to-one matching with contracts, we show that for any choice function that satisfies the irrelevance of rejected contracts condition (Aygün and Sönmez, 2013) and selects at most two contracts from any given set of contracts (two-unit demand), bilateral substitutability and weak substitutability are equivalent. As a corollary, we obtain a new maximal domain for the existence of stable matchings in the unit-capacity couples model. Finally, we show with an example that the equivalence between bilateral and weak substitutability crucially depends on the two-unit demand condition.

Suggested Citation

  • Tello, Benjamín, 2016. "Matching with contracts, substitutes and two-unit demand," Economics Letters, Elsevier, vol. 146(C), pages 85-88.
  • Handle: RePEc:eee:ecolet:v:146:y:2016:i:c:p:85-88
    DOI: 10.1016/j.econlet.2016.07.016
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    References listed on IDEAS

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    Cited by:

    1. Yang, Yi-You, 2020. "Rationalizable choice functions," Games and Economic Behavior, Elsevier, vol. 123(C), pages 120-126.

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    More about this item

    Keywords

    Matching; Contracts; Stability; Couples; Weak substitutability; Bilateral substitutability;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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