Decentralized Matching with Transfers: Experimental and Noncooperative Analyses

86 Pages Posted: 4 Jun 2020 Last revised: 6 Feb 2023

See all articles by Simin He

Simin He

Shanghai University of Finance and Economics - School of Economics

Jiabin Wu

University of Oregon - Department of Economics

Hanzhe Zhang

Department of Economics, Michigan State University

Xun Zhu

Fudan University - School of Management

Date Written: February 5, 2023

Abstract

We experimentally examine the Becker-Shapley-Shubik two-sided matching model. In the experiment, the aggregate outcomes of matching and surplus are affected by whether the pairwise Nash-Rubinstein bargaining outcome of equal surplus split is stable and, to a lesser extent, by whether efficient matching is assortative; the canonical cooperative theory predicts no effect. In balanced markets (markets with equal numbers of participants on both sides), individual payoffs in our and others' experiments cannot be explained by existing refinements of the core, but are consistent with the predictions of our noncooperative model. In imbalanced markets (markets with unequal numbers of participants on the two sides), noncompetitive outcomes, in which subjects on the long side do not fully compete, are not captured by the canonical cooperative model, but are included in the set of predictions in our noncooperative model.

Keywords: decentralized matching, matching with transfers, assignment games, bargaining, core

JEL Classification: C71, C72, C78, C92

Suggested Citation

He, Simin and Wu, Jiabin and Zhang, Hanzhe and Zhu, Xun, Decentralized Matching with Transfers: Experimental and Noncooperative Analyses (February 5, 2023). Available at SSRN: https://ssrn.com/abstract=3596703 or http://dx.doi.org/10.2139/ssrn.3596703

Simin He

Shanghai University of Finance and Economics - School of Economics ( email )

777 Guoding Road
Shanghai, 200433
China

Jiabin Wu

University of Oregon - Department of Economics ( email )

Eugene, OR 97403
United States

Hanzhe Zhang (Contact Author)

Department of Economics, Michigan State University ( email )

486 West Circle Drive
East Lansing, MI 48824
United States

HOME PAGE: http://hanzhezhang.github.io/

Xun Zhu

Fudan University - School of Management ( email )

Shanghai
China

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