A finite decentralized marriage market with bilateral search

Qinggong Wu

Journal of Economic Theory, 2015, vol. 160, issue C, 216-242

Abstract: I study a model in which a finite number of men and women look for future spouses via random pairwise meetings. The central question is whether equilibrium marriage outcomes are stable matchings when search frictions are small. The answer is they can but need not be. For any stable matching there is an equilibrium leading to it almost surely. However there may also be equilibria leading to an unstable matching almost surely. A restriction to simpler strategies or to markets with aligned preferences rules out such equilibria. However unstable—even Pareto-dominated—matchings may still arise with positive probability under those two restrictions combined. In addition, inefficiency due to delay may remain significant despite vanishing search frictions. Finally, a condition is identified under which all equilibria are outcome equivalent, stable, and efficient.

Keywords: Two-sided matching; Marriage problem; Stable matchings (search for similar items in EconPapers)
JEL-codes: C78 D83 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:160:y:2015:i:c:p:216-242

DOI: 10.1016/j.jet.2015.09.005

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