Wednesday, October 2, 2013
4:00 pm

Bray Theory Workshop

Stable Matching with Incomplete Information
Andrew Postlewaite, Harry P. Kamen Professor of Economics and Professor of Finance, Department of Economics, University of Pennsylvania

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. 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 then provide sufficient conditions for incomplete-information stable matchings to be efficient.  Lastly, we define a notion of price-sustainable allocations and show that the set of incomplete-information stable matchings is a subset of the set of such allocations.

Contact Jenny Niese at Ext. 6010
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