Conferences at Department of Economics, University of Toronto, Canadian Economic Theory Conference 2015

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Time Horizons, Lattice Structures, and Welfare in Multi-period Matching Markets

Sangram V. Kadam, Maciej H. Kotowski*

Date: 2015-05-08 2:00 pm – 2:30 pm
Last modified: 2015-05-04

Abstract


Consider a T-period, bilateral matching economy without monetary transfers. Under natural restrictions on agents’ preferences, which accommodate switching costs, status-quo bias, and other forms of inter-temporal complementarity, dynamically-stable matchings exist. Generally, “optimal” dynamically-stable matchings may not exist, but under a suitable partial order the stable set forms a lattice. The welfare properties of different stable outcomes is ascertained and the implications for normative market- design are discussed. The robustness of dynamically-stable matchings with respect to the market’s time horizon is examined.


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