Stable Belief and Stable Matching

Séminaire de théorie microéconomique de Montréal 2017-2018
conjoint avec les départements d’économique des universités de Montréal, Concordia et McGill ainsi que le CIRANO

salle H-1145 (Université Concordia, 1455, boul. de Maisonneuve ouest, 11e étage) 

Responsable : Ming Li (Concordia University)

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Résumé

We study matching problems with transferable utility in the presence of adverse selection, and define a notion of stability, i.e., immunity to individual and pairwise deviations, as the consistency of publicly observable matching outcomes and uninformed agents’ beliefs over informed agents’ private types. The definition incorporates both “off-stability beliefs” conditional on the blocking of deviating pairs, and “stable beliefs” in the absence of such deviations. We define a notion of Bayesian efficiency of matching outcomes relative to endogenous stable beliefs, and investigate robust efficiency properties that stable beliefs and stable matchings must jointly satisfy.