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Incomplete Information and Matching of Likes: A Mechanism Design Approach

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  • Dinko Dimitrov
  • Dipjyoti Majumdar

Abstract

We study the implementability of stable matchings in a two-sided market model with one-sided incomplete information. Firms' types are publicly known, whereas workers' types are private information. A mechanism generates a matching and additional announcements to the firms at each report profile of workers' types. When agents' preferences are increasing in the types of their matched partner, we show that the assortative matching mechanism which publicly announces the entire set of reported types is incentive compatible. Furthermore, any mechanism that limits information disclosure to firms' lower contour sets of reported types remains incentive compatible. However, when information is incomplete on both sides of the market, assortative matching is no longer implementable.

Suggested Citation

  • Dinko Dimitrov & Dipjyoti Majumdar, 2025. "Incomplete Information and Matching of Likes: A Mechanism Design Approach," Papers 2512.18764, arXiv.org.
    • Handle: RePEc:arx:papers:2512.18764
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    References listed on IDEAS

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    1. Dipjyoti Majumdar, 2003. "Ordinally Bayesian Incentive Compatible Stable Matching," Working Papers hal-00242988, HAL.
    2. Pearce, David G, 1984. "Rationalizable Strategic Behavior and the Problem of Perfection," Econometrica, Econometric Society, vol. 52(4), pages 1029-1050, July.
    3. Yi-Chun Chen & Gaoji Hu, 2023. "A Theory of Stability in Matching with Incomplete Information," American Economic Journal: Microeconomics, American Economic Association, vol. 15(1), pages 288-322, February.
    4. Chakraborty, Archishman & Citanna, Alessandro & Ostrovsky, Michael, 2010. "Two-sided matching with interdependent values," Journal of Economic Theory, Elsevier, vol. 145(1), pages 85-105, January.
    5. Dipjyoti Majumdar & Arunava Sen, 2003. "Ordinally Bayesian incentive-compatible voting schemes," Discussion Papers 03-01, Indian Statistical Institute, Delhi.
    6. M. Bumin Yenmez, 2013. "Incentive-Compatible Matching Mechanisms: Consistency with Various Stability Notions," American Economic Journal: Microeconomics, American Economic Association, vol. 5(4), pages 120-141, November.
    7. Qingmin Liu & George J. Mailath & Andrew Postlewaite & Larry Samuelson, 2014. "Stable Matching With Incomplete Information," Econometrica, Econometric Society, vol. 82(2), pages 541-587, March.
    8. Bernheim, B Douglas, 1984. "Rationalizable Strategic Behavior," Econometrica, Econometric Society, vol. 52(4), pages 1007-1028, July.
    9. Emiliya Lazarova & Dinko Dimitrov, 2017. "Paths to stability in two-sided matching under uncertainty," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(1), pages 29-49, March.
    10. Ehlers, Lars & Masso, Jordi, 2007. "Incomplete information and singleton cores in matching markets," Journal of Economic Theory, Elsevier, vol. 136(1), pages 587-600, September.
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