Profit-Maximizing Matchmaker

Hideo Konishi and Chiu Yu Ko

No 721, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: This paper considers a resource allocation mechanism that utilizes a profit-maximizing auctioneer/matchmaker in the Kelso-Crawford (1982) (many-to-one) assignment problem. We consider general and simple (individualized price) message spaces for firms' reports following Milgrom (2010). We show that in the simple message space, (i) the matchmaker's profit is always zero and an acceptable assignment is achieved in every Nash equilibrium, and (ii) the sets of stable assignments and strong Nash equilibria are equivalent. By contrast, in the general message space, the matchmaker may make a positive profit even in a strong Nash equilibrium. This shows that restricting message space not only reduces the information requirement but also improves resource allocation.

Keywords: two-sided matching problem; stable assignment; strong Nash equilibrium; coalition-proof Nash equilibrium; no-rent property; implementation theory (search for similar items in EconPapers)
JEL-codes: C71 C72 C78 (search for similar items in EconPapers)
Date: 2009-10-28, Revised 2012-04-23
New Economics Papers: this item is included in nep-bec and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published, Games and Economic Behavior

Downloads: (external link)
http://fmwww.bc.edu/EC-P/wp721.pdf main text (application/pdf)

Related works:
Journal Article: Profit-maximizing matchmaker (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:721

Access Statistics for this paper

More papers in Boston College Working Papers in Economics from Boston College Department of Economics Boston College, 140 Commonwealth Avenue, Chestnut Hill MA 02467 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F Baum ().