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Decentralized Matching with Aligned Preferences

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  • Muriel Niederle
  • Leeat Yariv

Abstract

We study a simple model of a decentralized market game in which firms make directed offers to workers. We focus on markets in which agents have aligned preferences. When agents have complete information or when there are no frictions in the economy, there exists an equilibrium that yields the stable match. In the presence of market frictions and preference uncertainty, harsher assumptions on the richness of the economy have to be made in order for decentralized markets to generate stable outcomes in equilibrium.

Suggested Citation

  • Muriel Niederle & Leeat Yariv, 2009. "Decentralized Matching with Aligned Preferences," NBER Working Papers 14840, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:14840
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    References listed on IDEAS

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    10. Jeremy T. Fox, 2018. "Estimating matching games with transfers," Quantitative Economics, Econometric Society, vol. 9(1), pages 1-38, March.
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    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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