Application Costs and Congestion in Matching Markets

YingHua He and Thierry Magnac

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Abstract: A matching market often requires recruiting agents, or ‘programmes', to costly screen ‘applicants', and congestion increases with the number of applicants to be screened. We investigate the role of application costs : higher costs reduce congestion by discouraging applicants from applying to certain programmes; however, they may harm match quality. In a multiple-elicitation experiment conducted in a real-life matching market, we implement variants of the Gale-Shapley deferred-acceptance mechanism with different application costs. Our experimental and structural estimates show that a (low) application cost effectively reduces congestion without harming match quality.

Keywords: Gale-Shapley Deferred Acceptance Mechanism; Costly Preference Formation; Screening; Stable Matching; Congestion; Matching Market Design (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-des and nep-exp
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Published in The Economic Journal, 2022, 132 (648), pp.2918-2950. ⟨10.1093/ej/ueac038⟩

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Related works:
Journal Article: Application Costs and Congestion in Matching Markets (2022)
Working Paper: Application Costs and Congestion in Matching Markets (2020)
Working Paper: Application Costs and Congestion in Matching Markets (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03979233

DOI: 10.1093/ej/ueac038

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