Application Costs and Congestion in Matching Markets

Thierry Magnac and YingHua He

No 15082, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: A matching market often requires recruiting agents, or ``programs,'' to costly screen ``applicants,'' and congestion increases with the number of applicants to be screened. We investigate the role of application costs: Higher costs reduce congestion by discouraging applicants from applying to certain programs; however, they may harm match quality. In a multiple-elicitation experiment conducted in a real-life matching market, we implement variants of the Gale-Shapley Deferred-Acceptance mechanism with different application costs. Our experimental and structural estimates show that a (low) application cost effectively reduces congestion without harming match quality.

Keywords: Gale-shapley deferred acceptance mechanism; Costly preference formation; Screening; Stable matching; Congestion; Matching market design (search for similar items in EconPapers)
JEL-codes: C78 D47 D50 D61 I21 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-des, nep-exp and nep-ore
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Application Costs and Congestion in Matching Markets (2022)
Working Paper: Application Costs and Congestion in Matching Markets (2022)
Working Paper: Application Costs and Congestion in Matching Markets (2019)
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