Truthtelling in Matching Markets

28 Pages Posted: 31 Oct 2017

See all articles by Frédéric Koessler

Frédéric Koessler

University of Cergy-Pontoise - THEMA

Thomas Trégouët

University of Cergy-Pontoise

Jeanne Hagenbach

Ecole Polytechnique, Palaiseau - CMAP CNRS-UMR 7641 and Ecole Polytechnique

Date Written: October 2017

Abstract

We analyze a search and matching model with non‐transferable utility and asymmetric information. Randomly paired agents go through an evaluation phase, at the end of which they discover each other's types and choose to match or not. Before deciding to enter this phase, agents can communicate through cheap talk. We provide conditions for this communication to be informative, and we examine how it affects agents' welfare. We show that communication is Pareto‐improving only when the matching is assortative in the absence of communication and left unchanged by information transmission.

Keywords: Cheap talk, marriage, matching; search

JEL Classification: C72, C78, D82, D83, J64

Suggested Citation

Koessler, Frédéric and Trégouët, Thomas and Hagenbach, Jeanne, Truthtelling in Matching Markets (October 2017). The Scandinavian Journal of Economics, Vol. 119, Issue 4, pp. 882-909, 2017, Available at SSRN: https://ssrn.com/abstract=3062311 or http://dx.doi.org/10.1111/sjoe.12203

Frédéric Koessler

University of Cergy-Pontoise - THEMA ( email )

33 boulevard du port
F-95011 Cergy-Pontoise Cedex, 95011
France

Thomas Trégouët

University of Cergy-Pontoise ( email )

33 Boulevard du Port
Cergy-Pontoise Cedex, Cedex 95011
France

Jeanne Hagenbach (Contact Author)

Ecole Polytechnique, Palaiseau - CMAP CNRS-UMR 7641 and Ecole Polytechnique ( email )

Route de Saclay
Palaiseau, 91128
France

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