Stable Outcomes for Two-Sided Contract Choice Problems

Somdeb Lahiri

Computational and Mathematical Organization Theory, 2005, vol. 10, issue 4, No 3, 323-334

Abstract: Abstract In this paper we study the cooperative theory of stable outcomes for the room-mates problem modeled as a contract choice problem. We show, that a simple generalization of the Deferred Acceptance Procedure with firms proposing due to Gale and Shapley (1962), yields outcomes for a two-sided contract choice problem, which necessarily belong to the core and are Weakly Pareto Optimal for firms. Under the additional assumptions: (a) given any two distinct workers, the set of yields achievable by a firm with the first worker is disjoint from the set of yields achievable by it with the second, and (b) the contract choice problem is pair-wise efficient, we prove that there is no stable outcome at which a firm can get more than what it gets at the unique outcome of our procedure.

Keywords: contract choice; two-sided; stable outcomes; matching; Weakly Pareto Optimal (search for similar items in EconPapers)
Date: 2005
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DOI: 10.1007/s10588-005-6284-0

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