Matching with Multilateral Contracts

51 Pages Posted: 6 Jul 2017  

Marzena J. Rostek

University of Wisconsin - Madison

Nathan Yoder

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics

Date Written: July 2, 2017

Abstract

The matching literature has focused on bilateral agreements. In this paper, we examine stability in environments where groups of agents interact. We do so by extending the matching with contracts (Hatfield and Milgrom (2005)) framework to allow for agreements among more than two agents and those which have externalities. In so doing, we offer a framework unifying the matching, network formation, and coalition formation literatures. In both transferable and nontransferable utility environments, we give results on existence, uniqueness, and efficiency of stable outcomes in environments with substitutes and those with complements. We also provide comparative statics results, showing how stable outcomes change when agreements are bundled together.

Keywords: Multilateral Matching, Matching with Contracts, Networks, Coalition Formation, Stability, Contract Design

JEL Classification: C78, C62, D47, D85, L14, F51, F55

Suggested Citation

Rostek, Marzena J. and Yoder, Nathan, Matching with Multilateral Contracts (July 2, 2017). Available at SSRN: https://ssrn.com/abstract=2997223

Marzena J. Rostek

University of Wisconsin - Madison ( email )

1180 Observatory Drive
Madison, WI 53703
United States
(608) 262-6723 (Phone)
(608) 262-2033 (Fax)

HOME PAGE: http://www.ssc.wisc.edu/~mrostek

Nathan Yoder (Contact Author)

University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics ( email )

Athens, GA 30602-6254
United States

HOME PAGE: http://https://sites.google.com/site/nathanyoderecon/

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