Monotone Equilibrium in Matching Markets with Signaling

Seungjin Han, Alex Sam and Youngki Shin

Papers from arXiv.org

Abstract: We introduce a notion of competitive signaling equilibrium (CSE) in one-to-one matching markets with a continuum of heterogeneous senders and receivers. We then study monotone CSE where equilibrium outcomes - sender actions, receiver reactions, beliefs, and matching - are all monotone in the stronger set order. We show that if the sender utility is monotone-supermodular and the receiver's utility is weakly monotone-supermodular, a CSE is stronger monotone if and only if it passes Criterion D1 (Cho and Kreps (1987), Banks and Sobel (1987)). Given any interval of feasible reactions that receivers can take, we fully characterize a unique stronger monotone CSE and establishes its existence with quasilinear utility functions.

Date: 2021-09, Revised 2024-01
New Economics Papers: this item is included in nep-isf
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Published in Journal of Economic Theory, Vol 216, Article 105801, 2024

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Journal Article: Monotone equilibrium in matching markets with signaling (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2109.03370

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