Strategic complementarities and unraveling in matching markets

Federico Echenique and Juan Sebastian Pereyra Barreiro

ULB Institutional Repository from ULB -- Universite Libre de Bruxelles

Abstract: We present a theoretical explanation of inefficient early matching in matching markets. Our explanation is based on strategic complementarities and strategic unraveling. We identify a negative externality imposed on the rest of the market by agents who make early offers. As a consequence, an agent may make an early offer because she is concerned that others are making early offers. Yet other agents make early offers because they are concerned that others worry about early offers, and so on and so forth. The end result is that any given agent is more likely to make an early offer than a late offer.

Keywords: assortative matching; Gale-Shapley; Stable matching; strategic complementarities; two-sided matching; unraveling (search for similar items in EconPapers)
Date: 2016-01
Note: SCOPUS: ar.j
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Citations: View citations in EconPapers (14)

Published in: Theoretical Economics (2016) v.11 n° 1,p.1-39

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Journal Article: Strategic complementarities and unraveling in matching markets (2016)
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