Published March 22, 2016
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Strategic Uncertainty and Unraveling in Matching Markets
Abstract
We present a theoretical explanation of inefficient early matching in matching markets. Our explanation is based on strategic uncertainty 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 later offer.
Additional Information
April 15, 2013. We are grateful to David Cantala, Seraffin Frache, Drew Fudenberg, Andres Sambarino, Juan Gabriel Brida, Doron Zeilberger, Szilvia Papai, Renzo Sprugnoli, Christoph Koutschan, Marcelo Lanzilotta, Gaston Cayssials, Damian Gibaja, Pablo Sanchez Buelna, Benjamin Tello for their comments and suggestions and the seminar participants at the Free University of Bolzano.Attached Files
Accepted Version - sswp1373.pdf
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Additional details
- Eprint ID
- 65548
- Resolver ID
- CaltechAUTHORS:20160321-134856275
- Created
-
2016-03-22Created from EPrint's datestamp field
- Updated
-
2019-11-26Created from EPrint's last_modified field
- Caltech groups
- Social Science Working Papers
- Series Name
- Social Science Working Paper
- Series Volume or Issue Number
- 1373