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Assortative Matching by Lottery Contests

Chen Cohen, Ishay Rabi and Aner Sela
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Chen Cohen: Department of Public Policy and Administration, Guilford Glazer Faculty of Business and Management, Ben-Gurion University of the Negev, Beer Sheva 84105, Israel
Ishay Rabi: Department of Economics, Ben-Gurion University of the Negev, Beer Sheva 84105, Israel

Games, 2022, vol. 13, issue 5, 1-20

Abstract: We study two-sided matching contests with two sets, A and B , each of which includes a finite number of heterogeneous agents with commonly known types. The agents in each set compete in a lottery (Tullock) contest, and then are assortatively matched, namely, the winner of set A is matched with the winner of set B and so on until all the agents in the set with the smaller number of agents are matched. Each agent has a match value that depends on their own type and the type of their match. We assume that the agents’ efforts do not affect their match values and that they have a positive effect on welfare. Therefore, an interior equilibrium in which at least some of the agents are active is welfare superior to a corner equilibrium in which the agents choose to be non-active. We analyze the conditions under which there exists a (partial) interior equilibrium where at least some of the agents compete against each other and exert positive efforts.

Keywords: two-sided matching; Tullock contest (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2022
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