Everyone Likes to Be Liked: Experimental Evidence from Matching Markets

Timm Opitz and Christoph Schwaiger
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Timm Opitz: MPI-IC Munich and LMU Munich
Christoph Schwaiger: LMU Munich

No 366, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: Matching markets can be unstable when individuals prefer to be matched to a partner who also wants to be matched with them. Through a pre-registered and theory-guided laboratory experiment, we provide evidence that such reciprocal preferences exist, significantly decrease stability in matching markets, and are driven both by belief-based and preference-based motives. Participants expect partners who want to be matched with them to be more cooperative, and are more altruistic themselves. This leads to higher cooperation and larger profits when participants can consider each other's preferences.

Keywords: experiment; market design; matching; reciprocal preferences; incomplete information; Gale-Shapley deferred acceptance mechanism (search for similar items in EconPapers)
JEL-codes: C78 C91 C92 D82 D83 D91 (search for similar items in EconPapers)
Date: 2023-01-03
New Economics Papers: this item is included in nep-des and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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