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Matching and price competition: beyond symmetric linear costs

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  • Julio González-Díaz
  • Ron Siegel

Abstract

Bulow and Levin’s ( 2006 ) “Matching and Price Competition” studies a matching model in which hospitals compete for interns by offering wages. We relax the assumption of symmetric linear costs and compare the pricing equilibrium that results to the firm-optimal competitive equilibrium. With linear and asymmetric costs, competition in the pricing equilibrium may not be localized, but all other qualitative comparisons of Bulow and Levin ( 2006 ) hold. With non-linear and symmetric costs workers’ average utility in the pricing equilibrium may be higher than in the firm- optimal competitive equilibrium. With asymmetric and non-linear costs, firms need not choose scores from an interval in a pricing equilibrium, which may make competition even less localized. Copyright Springer-Verlag 2013

Suggested Citation

  • Julio González-Díaz & Ron Siegel, 2013. "Matching and price competition: beyond symmetric linear costs," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(4), pages 835-844, November.
    • Handle: RePEc:spr:jogath:v:42:y:2013:i:4:p:835-844
    DOI: 10.1007/s00182-012-0325-y
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    References listed on IDEAS

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    1. Fuhito Kojima, 2007. "Matching and Price Competition: Comment," American Economic Review, American Economic Association, vol. 97(3), pages 1027-1031, June.
    2. Jun Xiao, 2012. "Asymmetric All-Pay Contests with Heterogeneous," Department of Economics - Working Papers Series 1151, The University of Melbourne.
    3. Jeremy Bulow & Jonathan Levin, 2006. "Matching and Price Competition," American Economic Review, American Economic Association, vol. 96(3), pages 652-668, June.
    4. Ron Siegel, 2009. "All-Pay Contests," Econometrica, Econometric Society, vol. 77(1), pages 71-92, January.
    5. Ron Siegel, 2010. "Asymmetric Contests with Conditional Investments," American Economic Review, American Economic Association, vol. 100(5), pages 2230-2260, December.
    6. Barut, Yasar & Kovenock, Dan, 1998. "The symmetric multiple prize all-pay auction with complete information," European Journal of Political Economy, Elsevier, vol. 14(4), pages 627-644, November.
    7. Georgy Artemov, 2008. "Matching and price competition: would personalized prices help?," International Journal of Game Theory, Springer;Game Theory Society, vol. 36(3), pages 321-331, March.
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    Cited by:

    1. Xiao, Jun, 2018. "All-pay contests with performance spillovers," Mathematical Social Sciences, Elsevier, vol. 92(C), pages 35-39.
    2. Chen Cohen & David Lagziel & Ofer Levi & Aner Sela, 2020. "All-Pay Auctions With Heterogeneous Prizes And Partially Asymmetric Players," Working Papers 2010, Ben-Gurion University of the Negev, Department of Economics.
    3. Chen Cohen & Ishay Rabi & Aner Sela, 2022. "Assortative Matching by Lottery Contests," Games, MDPI, vol. 13(5), pages 1-20, September.
    4. Cohen, Chen & Lagziel, David & Levi, Ofer & Sela, Aner, 2023. "The role of the second prize in all-pay auctions with two heterogeneous prizes," Journal of Mathematical Economics, Elsevier, vol. 105(C).
    5. Xiao, Jun, 2023. "Ability grouping in contests," Journal of Mathematical Economics, Elsevier, vol. 104(C).
    6. Aner Sela & Chen Cohen & Ishay Rabi, 2024. "An Algorithmic Analysis of Parallel Contests," Working Papers 2408, Ben-Gurion University of the Negev, Department of Economics.
    7. Boosey Luke A., 2016. "Competition in a Posted-Salary Matching Market under Private Information," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 16(2), pages 599-631, June.
    8. Xiao, Jun, 2016. "Asymmetric all-pay contests with heterogeneous prizes," Journal of Economic Theory, Elsevier, vol. 163(C), pages 178-221.

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