Matching with Contracts

Paul Milgrom

Working Papers from Stanford University, Department of Economics

Abstract: March 2003

We introduce a two-sided matching model with contracts that subsumes and extends the Gale-Shapley matching model, the Kelso-Crawford labor market model and the Ausubel-Milgrom package auction model. We identify the maximal set of preferences over contracts for which a stable match exists and the narrower set of preferences for which an analog of Roth’s “rural hospitals” result holds. Using the extended model, we characterize the dynamics of re-matching following a retirement and explore doctors’ incentives to report truthfully.

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Date: 2003-03
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Journal Article: Matching with Contracts (2005)
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