Substitutes and stability for matching with contracts

John William Hatfield and Fuhito Kojima

Journal of Economic Theory, 2010, vol. 145, issue 5, 1704-1723

Abstract: We consider the matching with contracts framework of Hatfield and Milgrom [20], and we introduce new concepts of bilateral and unilateral substitutes. We show that the bilateral substitutes condition is a sufficient condition for the existence of a stable allocation in this framework. However, the set of stable allocations does not form a lattice under this condition, and there does not necessarily exist a doctor-optimal stable allocation. Under a slightly stronger condition, unilateral substitutes, the set of stable allocations still does not necessarily form a lattice with respect to doctors' preferences, but there does exist a doctor-optimal stable allocation, and other key results such as incentive compatibility and the rural hospitals theorem are recovered.

Keywords: Substitutes; Bilateral; substitutes; Unilateral; substitutes; Matching; Matching; with; contracts; Law; of; aggregate; demand; Stability; Strategy-proofness; Rural; hospitals; theorem; Group; strategy-proofness; Lattice (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (127)

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