Contract terms monotonicity in matching markets

Cyril Rouault

Theoretical Economics, Forthcoming

Abstract: We study doctor–hospital matching markets with contracts, in which hospitals can offer a range of contract terms to doctors. We show that introducing new terms can reduce doctors’ welfare, whereas withdrawing terms may generate a Pareto improvement. We establish the preference domains under which welfare is preserved and show that only \textit{agent-lexicographic preferences} for all agents ensure that no doctor is worse off when additional terms are introduced. Since this condition is rarely satisfied in practice, our results imply that most real-world markets are vulnerable to welfare losses when the set of contract terms expands.

Keywords: Matching with contracts; stability; adding terms; welfare; agent-lexicographic preferences (search for similar items in EconPapers)
JEL-codes: C78 D47 D71 D86 (search for similar items in EconPapers)
Date: 2026-07-09
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Related works:
Working Paper: Contract Terms Monotonicity in Matching Markets (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:the:publsh:6473

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