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Role of common preferences in the outcome of many-to-many matching

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  • Lee, Joonbae

Abstract

This study analyzes how preference alignment affects outcomes in a many-to-many, anonymous matching market with multiple applications. When all firms rank applicants (workers) by a single, unanimous measure, a high type worker enjoys the freedom of choice at the expense of other low type workers. Instead, if each firm randomly ranks the pool of applicants, a worker’s choice set is restricted to a few firms that value him/her the most. When types are uniformly distributed, the second regime dominates the first both in the average quality of a match and the total number of matches. Therefore, it is possible that a blind policy, which restricts information and increases preference uncertainty, helps improve the efficiency of a matching market.

Suggested Citation

  • Lee, Joonbae, 2022. "Role of common preferences in the outcome of many-to-many matching," Economics Letters, Elsevier, vol. 217(C).
    • Handle: RePEc:eee:ecolet:v:217:y:2022:i:c:s016517652200221x
    DOI: 10.1016/j.econlet.2022.110667
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    References listed on IDEAS

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    1. Albrecht, James & Cai, Xiaoming & Gautier, Pieter & Vroman, Susan, 2020. "Multiple applications, competing mechanisms, and market power," Journal of Economic Theory, Elsevier, vol. 190(C).
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    3. James Albrecht, Pieter Gautier, & Susan Vroman, 2003. "Matching with Multiple Applications: The Limiting Case," Working Papers gueconwpa~03-03-25, Georgetown University, Department of Economics.
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    More about this item

    Keywords

    Ranking and matching; Matching with multiple applications; Blind policy; Simultaneous search;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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