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Matching with Incomplete Information

  • Qingmin Liu


    (Department of Economics, Columbia University)

  • George J. Mailath


    (Department of Economics, University of Pennsylvania)

  • Andrew Postlewaite


    (Department of Economics, University of Pennsylvania)

  • Larry Samuelson


    (Department of Economics, Yale University)

A large literature uses matching models to analyze markets with two-sided heterogeneity, studying problems such as the matching of students to schools, residents to hospitals, husbands to wives, and workers to firms. The analysis typically assumes that the agents have complete information, and examines core outcomes. We formulate a notion of stable outcomes in matching problems with one-sided asymmetric information. The key conceptual problem is to formulate a notion of a blocking pair that takes account of the inferences that the uninformed agent might make from the hypothesis that the current allocation is stable. We show that the set of stable outcomes is nonempty in incomplete information environments, and is a superset of the set of complete-information stable outcomes. We provide sufficient conditions for incomplete-information stable matchings to be efficient.

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Paper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 12-032.

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Length: 43 pages
Date of creation: 26 Aug 2012
Date of revision:
Handle: RePEc:pen:papers:12-032
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  1. 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.
  2. Heidrun C. Hoppe & Benny Moldovanu & Aner Sela, 2009. "The Theory of Assortative Matching Based on Costly Signals," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 253-281.
  3. Dutta, Bhaskar & Vohra, Rajiv, 2005. "Incomplete information, credibility and the core," Mathematical Social Sciences, Elsevier, vol. 50(2), pages 148-165, September.
  4. Benjamin Edelman & Michael Ostrovsky & Michael Schwarz, 2005. "Internet Advertising and the Generalized Second Price Auction: Selling Billions of Dollars Worth of Keywords," NBER Working Papers 11765, National Bureau of Economic Research, Inc.
  5. Forges, F., 1991. "Posterior efficiency," CORE Discussion Papers 1991045, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. 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.
  7. repec:bla:restud:v:76:y:2009:i:1:p:253-281 is not listed on IDEAS
  8. Chade, Hector, 2006. "Matching with noise and the acceptance curse," Journal of Economic Theory, Elsevier, vol. 129(1), pages 81-113, July.
  9. Chade, H. & Lewis, Gregory & Smith, L., 2014. "Student Portfolios and the College Admissions Problem," Scholarly Articles 12363836, Harvard University Department of Economics.
  10. Stephan Lauermann & Georg Nöldeke, 2012. "Stable Marriages and Search Frictions," Working papers 2012/10, Faculty of Business and Economics - University of Basel.
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