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Implementation of assortative matching under incomplete information

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  • Utgoff, Naomi

Abstract

This paper provides a unifying framework for matching markets with incomplete information in which the positive assortative match is always efficient. I construct a Vickrey-Clarke-Groves-like mechanism which implements the positive assortative match as an ex post Nash equilibrium. It achieves this result by using a payment rule that distinguishes between an agent deprived of any match and an agent who merely receives a reduced match value. The constructed mechanism recognizes only opportunity costs arising from the former, and not the latter, effect. I also generalize the stronger condition of envy freeness to these incomplete information environments and show that the constructed equilibrium is envy free.

Suggested Citation

  • Utgoff, Naomi, 2020. "Implementation of assortative matching under incomplete information," Journal of Economic Theory, Elsevier, vol. 188(C).
    • Handle: RePEc:eee:jetheo:v:188:y:2020:i:c:s0022053120300521
    DOI: 10.1016/j.jet.2020.105054
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    References listed on IDEAS

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    Cited by:

    1. Naomi Utgoff, 2022. "Informational Hold Up and Intermediaries," Games, MDPI, vol. 13(5), pages 1-14, September.

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    More about this item

    Keywords

    Matching; Market design; Auctions; Mechanism design;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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