Matching with Aggregate Externalities

Isa Hafalir and Fisher James

No 2015-E5, GSIA Working Papers from Carnegie Mellon University, Tepper School of Business

Abstract: Certain aggregate externalities, like those due to knowledge and public goods, do not change very much in response to changes in two individuals’ actions. Thus, individuals rationally regard the level of the externality as fixed in their negotiations with each other. We leverage this observation to develop a general framework for the existence of stable matchings in large and finite one-to-one matching games, and we characterize intuitive restrictions on preferences that are sufficient for existence.

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Journal Article: Matching with aggregate externalities (2016)
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