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Envious Preferences in Two-sided Matching

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  • Ahamad, Mazbahul

Abstract

We develop a model of two-sided matching problem with individual-sided envious preferences that originate from an emulative envy effect in which a more desirable state that is preferred is owned by the other individual. We assume envious preferences influence an individual’s decision to enter into a two-sided network instead of being unassigned. In this paper, we show that an individual-sided envious preference leads to a stable matching under a two-sided market framework. Applying the mechanism of the model to behavioral contract theory, we show that individual-proposing envious acceptance leads to stable farmer-buyer contract matching considering buyer’s time invariant preference. We further argue that individual’s envious preference also contributes to herd-type acceptance that dominates individual’s logical preferences in participation decision under a less risky environment.

Suggested Citation

  • Ahamad, Mazbahul, 2016. "Envious Preferences in Two-sided Matching," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235482, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:235482
    DOI: 10.22004/ag.econ.235482
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    References listed on IDEAS

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    Keywords

    Agribusiness; Agricultural and Food Policy; Industrial Organization; Institutional and Behavioral Economics;
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