Matching with Contracts: The Critical Role of Irrelevance of Rejected Contracts

Orhan Aygun () and Tayfun Sönmez

No 804, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: We show that an ambiguity in setting the primitives of the matching with contracts model by Hatfield and Milgrom (2005) has serious implications for the model. Of the two ways to clear the ambiguity, the first (and what we consider more "clean") remedy renders several of the results of the paper invalid in the absence of an additional irrelevance of removed contracts condition implicitly assumed throughout the paper, whereas the second remedy results in the lack of transparency in presentation of results while at the same time reducing the scope of the analysis with no clear benefit.

Keywords: Matching with Contracts; Stability; Market Design (search for similar items in EconPapers)
JEL-codes: C78 D63 D78 (search for similar items in EconPapers)
Date: 2012-05-31
New Economics Papers: this item is included in nep-bec and nep-gth
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Citations: View citations in EconPapers (14)

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