Matching and price competition: beyond symmetric linear costs

Julio González-Díaz and Ron Siegel

International Journal of Game Theory, 2013, vol. 42, issue 4, 835-844

Abstract: Bulow and Levin’s ( 2006 ) “Matching and Price Competition” studies a matching model in which hospitals compete for interns by offering wages. We relax the assumption of symmetric linear costs and compare the pricing equilibrium that results to the firm-optimal competitive equilibrium. With linear and asymmetric costs, competition in the pricing equilibrium may not be localized, but all other qualitative comparisons of Bulow and Levin ( 2006 ) hold. With non-linear and symmetric costs workers’ average utility in the pricing equilibrium may be higher than in the firm- optimal competitive equilibrium. With asymmetric and non-linear costs, firms need not choose scores from an interval in a pricing equilibrium, which may make competition even less localized. Copyright Springer-Verlag 2013

Keywords: Matching; Asymmetric non-linear costs; All-pay contest; Pricing equilibrium; Competitive equilibrium (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (9)

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DOI: 10.1007/s00182-012-0325-y

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