Stable Matching with Incomplete Information, Second Version

Qingmin Liu (), George Mailath, Andrew Postlewaite and Larry Samuelson ()
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Qingmin Liu: Department of Economics, Columbia University
Larry Samuelson: Department of Economics, Yale University

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: We formulate a notion of stable outcomes in matching problems with one-sided asymmetric information. The key conceptual problem is to formulate a notion of a blocking pair that takes account of the inferences that the uninformed agent might make from the hypothesis that the current allocation is stable. We show that the set of stable outcomes is nonempty in incomplete information environments, and is a superset of the set of complete-information stable outcomes. We then provide sufficient conditions for incomplete-information stable matchings to be efficient. Lastly, we define a notion of price sustainable allocations and show that the set of incomplete- information stable matchings is a subset of the set of such allocations.

Keywords: Matching; Stability; Stable outcome; Incomplete information; Core (search for similar items in EconPapers)
JEL-codes: C71 C78 D5 D8 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2010-01-10, Revised 2012-10-28
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Working Paper: Stable Matching with Incomplete Information, Second Version (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:12-042

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