Matching with Multilateral Contracts
31 Pages Posted: 6 Jul 2017 Last revised: 8 Dec 2018
Date Written: December 7, 2018
We examine stability in matching environments where agreements may be multilateral or have externalities. We offer a general characterization of stability in terms of aggregate (rather than individual) choice and give two existence results. The first is for environments where agreements are substitutes and the market behaves as if it has two implicit “sides”. The other shows that a unique stable outcome exists when agents' choices from the set of all contracts are sufficiently aligned, even without substitutability. Both results show that stable outcomes do not require two sides of the market within which no contracting occurs.
Keywords: Multilateral Matching, Externalities, Matching with Contracts, Stability
JEL Classification: C78, C62, D47, D85, L14, F51, F55
Suggested Citation: Suggested Citation