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Stability in Matching with Externalities: Pairs Competition and Oligopolistic Joint Ventures

Author

Listed:
  • Kenzo Imamura

    (University of Tokyo Market Design Center)

  • Hideo Konishi

    (Boston College)

  • Chen-Yu Pan

    (National Chengchi University, Taiwan)

Abstract

This paper presents one-to-one matching and assignment problems with externalities across pairs such as pairs figure skating competition and joint ventures in oligopolistic markets. In these models, players care not only about their partners but also which and how many rival pairs are formed. Thus, it is important for a deviating pair to know which matching will realize after it deviates from a matching (an effectiveness function) in order to define pairwise stable matching. Using a natural effectiveness function for such environments, we show that the assortative matching is pairwise stable. We discuss two generalizations of our model including intrinsic preferences on partners and pair-specific match qualities to see how our stability concept performs in these generalized models.

Suggested Citation

  • Kenzo Imamura & Hideo Konishi & Chen-Yu Pan, 2021. "Stability in Matching with Externalities: Pairs Competition and Oligopolistic Joint Ventures," Boston College Working Papers in Economics 1039, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:1039
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    Cited by:

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    More about this item

    Keywords

    one-to-one matching; matching with externalities; pairwise stable matching; coalition formation; group contest; joint ventures; myopia; farsightedness.;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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