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A finite decentralized marriage market with bilateral search

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  • Wu, Qinggong

Abstract

I study a model in which a finite number of men and women look for future spouses via random pairwise meetings. The central question is whether equilibrium marriage outcomes are stable matchings when search frictions are small. The answer is they can but need not be. For any stable matching there is an equilibrium leading to it almost surely. However there may also be equilibria leading to an unstable matching almost surely. A restriction to simpler strategies or to markets with aligned preferences rules out such equilibria. However unstable—even Pareto-dominated—matchings may still arise with positive probability under those two restrictions combined. In addition, inefficiency due to delay may remain significant despite vanishing search frictions. Finally, a condition is identified under which all equilibria are outcome equivalent, stable, and efficient.

Suggested Citation

  • Wu, Qinggong, 2015. "A finite decentralized marriage market with bilateral search," Journal of Economic Theory, Elsevier, vol. 160(C), pages 216-242.
  • Handle: RePEc:eee:jetheo:v:160:y:2015:i:c:p:216-242
    DOI: 10.1016/j.jet.2015.09.005
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    References listed on IDEAS

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    Cited by:

    1. BONKOUNGOU, Somouaoga, 2016. "Pareto dominance of deferred acceptance through early decision," Cahiers de recherche 2016-07, Universite de Montreal, Departement de sciences economiques.
    2. Somouaoga BONKOUNGOU, 2016. "Pareto Dominance of Deferred Acceptance through Early Decision," Cahiers de recherche 11-2016, Centre interuniversitaire de recherche en économie quantitative, CIREQ.

    More about this item

    Keywords

    Two-sided matching; Marriage problem; Stable matchings;

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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