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Truthtelling in Matching Markets

Author

Listed:
  • Jeanne Hagenbach

    (X - École polytechnique - IP Paris - Institut Polytechnique de Paris)

  • Frédéric Koessler

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Thomas Trégouët

    (UCP - Université de Cergy Pontoise - Université Paris-Seine)

Abstract

We analyze a search and matching model with non-transferable utility and asymmetric information. Randomly paired agents go through an evaluation phase, at the end of which they discover each other's types and choose to match or not. Before deciding to enter this phase, agents can communicate through cheap talk. We provide conditions for this communication to be informative, and we examine how it affects agents' welfare. We show that communication is Pareto-improving only when the matching is assortative in the absence of communication and left unchanged by information transmission.

Suggested Citation

  • Jeanne Hagenbach & Frédéric Koessler & Thomas Trégouët, 2017. "Truthtelling in Matching Markets," PSE-Ecole d'économie de Paris (Postprint) hal-01629300, HAL.
    • Handle: RePEc:hal:pseptp:hal-01629300
    DOI: 10.1111/sjoe.12203
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    Cited by:

    1. Paul M. Anglin & Yanmin Gao, 2023. "Value of Communication and Social Media: An Equilibrium Theory of Messaging," The Journal of Real Estate Finance and Economics, Springer, vol. 66(4), pages 861-903, May.

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