Role of common preferences in the outcome of many-to-many matching

Joonbae Lee

Economics Letters, 2022, vol. 217, issue C

Abstract: This study analyzes how preference alignment affects outcomes in a many-to-many, anonymous matching market with multiple applications. When all firms rank applicants (workers) by a single, unanimous measure, a high type worker enjoys the freedom of choice at the expense of other low type workers. Instead, if each firm randomly ranks the pool of applicants, a worker’s choice set is restricted to a few firms that value him/her the most. When types are uniformly distributed, the second regime dominates the first both in the average quality of a match and the total number of matches. Therefore, it is possible that a blind policy, which restricts information and increases preference uncertainty, helps improve the efficiency of a matching market.

Keywords: Ranking and matching; Matching with multiple applications; Blind policy; Simultaneous search (search for similar items in EconPapers)
JEL-codes: C78 D85 J64 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:217:y:2022:i:c:s016517652200221x

DOI: 10.1016/j.econlet.2022.110667

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