Matching and price competition: would personalized prices help?

DOI10.1007/S00182-007-0087-0MaRDI QIDQ2482676zbMATH OpenOpenAlexFDO

Authors Georgy Artemov

Publication date 23 April 2008

Published in International Journal of Game Theory (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1007/s00182-007-0087-0

zbMATH Keywords

market designmatching modelswave competition

Mathematics Subject Classification ID

Matching models (91B68)

Review text

The author analyzes the generalized deferred- acceptance algorithm when preferences are known with an error. This algorithm incorporates personalized salaries and is considered as a replacement for the current algorithm for National Resident Matching Program. Maintaining Bulow and Levin's assumption on preferences [Am. Econ. Rev. 96(3) 652--668 (2006)], he shows that an error in preferences of a worker propagates through the algorithm, leading to a change in the salary of every more productive worker. Thus, relatively small individual errors accumulate towards the top and may lead to highly distorted salaries for top workers the same way as mild compression translates into highly compressed salaries on the top in the Bulow in the Levin study of the current National Resident Matching Program algorithm.

Recommendations

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Cites work

• Job matching with heterogeneous firms and workers
• Job Matching, Coalition Formation, and Gross Substitutes
• Misrepresentation and stability in the marriage problem
• The Economics of Matching: Stability and Incentives

Cited in

(3)

• Deferred acceptance algorithms: history, theory, practice, and open questions
• Matching and price competition: beyond symmetric linear costs
• Interview hoarding

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