Matching Markets via Descending Price

Abstract

A market for matching participants with each other, such as buyers and sellers of labor, faces two challenges: efficiently coordinating information acquisition processes such as job interviews; and efficiently coordinating high-value matches. We propose a general descending-price market design called the Marshallian Match. In contrast to existing ascending or deferred-acceptance style proposals, the descending-price design is compatible with optimal search theory, allowing it to address both challenges.

Keywords: matching markets, descending price, market design, mechanism design