Matching with Incomplete Information

45 Pages Posted: 29 Aug 2012

See all articles by Quingmin Liu

Quingmin Liu

Columbia University, Graduate School of Arts and Sciences, Department of Economics

George J. Mailath

University of Pennsylvania - Department of Economics; Research School of Economics, ANU

Andrew Postlewaite

University of Pennsylvania - Department of Economics

Larry Samuelson

Yale University - Department of Economics; Yale University - Cowles Foundation

Multiple version iconThere are 2 versions of this paper

Date Written: August 6, 2012

Abstract

A large literature uses matching models to analyze markets with two-sided heterogeneity, studying problems such as the matching of students to schools, residents to hospitals, husbands to wives, and workers to firms. The analysis typically assumes that the agents have complete information, and examines core outcomes. We formulate a notion of stable outcomes in matching problems with one-sided asymmetric information. The key conceptual problem is to formulate a notion of a blocking pair that takes account of the inferences that the uninformed agent might make from the hypothesis that the current allocation is stable. We show that the set of stable outcomes is nonempty in incomplete information environments, and is a superset of the set of complete-information stable outcomes. We provide sufficient conditions for incomplete-information stable matchings to be efficient.

Keywords: Matching, Stability, Stable outcome, Incomplete information, Core

JEL Classification: C71, C78, D5, D8

Suggested Citation

Liu, Quingmin and Mailath, George J. and Postlewaite, Andrew and Samuelson, Larry, Matching with Incomplete Information (August 6, 2012). PIER Working Paper No. 12-032, Available at SSRN: https://ssrn.com/abstract=2137069 or http://dx.doi.org/10.2139/ssrn.2137069

Quingmin Liu

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

George J. Mailath

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-7908 (Phone)
215-573-2057 (Fax)

HOME PAGE: http://web.sas.upenn.edu/gmailath/

Research School of Economics, ANU ( email )

HW Arndt Building
College of Business and Economics
Canberra, ACT 2601
Australia

Andrew Postlewaite (Contact Author)

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-7350 (Phone)
215-573-2057 (Fax)

HOME PAGE: http://www.econ.upenn.edu/~apostlew

Larry Samuelson

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

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