Matching Networks with Bilateral Contracts

John William Hatfield and Scott Kominers
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John William Hatfield: Stanford University

Research Papers from Stanford University, Graduate School of Business

Abstract: We introduce a model in which firms trade goods via bilateral contracts which specify a buyer, a seller, and the terms of the exchange. This setting subsumes (many-to- many) matching with contracts, as well as supply chain matching. When firms' relationships do not exhibit a supply chain structure, stable allocations need not exist. By contrast, in the presence of supply chain structure, a natural substitutability condition characterizes the maximal domain of firm preferences for which stable allocations always exist. Furthermore, the classical lattice structure, rural hospitals theorem, and one-sided strategy-proofness results all generalize to this setting.

Date: 2010-02
New Economics Papers: this item is included in nep-gth and nep-mic
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Journal Article: Matching in Networks with Bilateral Contracts (2012)
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