Matching, Unanticipated Experiences, Divorce, Flirting, Rematching, Etc

Burkhard Schipper and Tina Danting Zhang
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Tina Danting Zhang: Department of Economics, University of California Davis

No 371, Working Papers from University of California, Davis, Department of Economics

Abstract: We study dynamic decentralized two-sided matching where players' preferences evolve due to unanticipated experiences. Stability requires no pairwise common belief in blocking, but unanticipated experiences can destabilize matchings. We show the existence of self-confirming outcomes that are stable and do not lead to unanticipated experiences. We propose a decentralized matching process that prioritizes mutual optimal blocking pairs with probability 1 - epsilon and picks any other optimal blocking pair with epsilon, representing market frictions. For convergence to self-confirming stable outcomes in every matching market, frictions are necessary even without unawareness. We extend our results by allowing communication and show convergence to flirt-proof self-confirming outcomes.

Keywords: decentralized matching; unawareness; transformative experiences; endogenous preferences; disclosure (search for similar items in EconPapers)
JEL-codes: C70 D83 (search for similar items in EconPapers)
Pages: 41
Date: 2025-04-01
New Economics Papers: this item is included in nep-des and nep-mic
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Working Paper: Matching, Unanticipated Experiences, Divorce, Flirting, Rematching, Etc (2025)
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