Surplus efficiency of ex ante investments in matching markets with nontransferabilities
Surplus efficiency of ex ante investments in matching markets with nontransferabilities
Does a competitive equilibrium in a matching market provide adequate incentives for investments made before the market when utility is not perfectly transferable? In a one-sided market with a continuum of agents and finite types there is a constrained surplus efficient equilibrium, when a social planner can only affect investments but not payoffs nor matches, if an equal treatment property holds in equilibrium. Sufficient (but not full) utility transferability in a well defined sense implies this property. Ex post efficiency of payoffs (i.e., individual payoffs maximize the surplus in each match) alone is not sufficient to ensure that equilibrium investments maximize aggregate surplus.
matching, assignment models, investments, nontransferableutility, graph theory
51-78
Gall, Thomas
8df67f3d-fe3c-4a3f-8ce7-e2090557fcd4
1 March 2017
Gall, Thomas
8df67f3d-fe3c-4a3f-8ce7-e2090557fcd4
Gall, Thomas
(2017)
Surplus efficiency of ex ante investments in matching markets with nontransferabilities.
International Journal of Game Theory, 46 (1), .
(doi:10.1007/s00182-015-0522-6).
Abstract
Does a competitive equilibrium in a matching market provide adequate incentives for investments made before the market when utility is not perfectly transferable? In a one-sided market with a continuum of agents and finite types there is a constrained surplus efficient equilibrium, when a social planner can only affect investments but not payoffs nor matches, if an equal treatment property holds in equilibrium. Sufficient (but not full) utility transferability in a well defined sense implies this property. Ex post efficiency of payoffs (i.e., individual payoffs maximize the surplus in each match) alone is not sufficient to ensure that equilibrium investments maximize aggregate surplus.
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Accepted/In Press date: 30 November 2015
e-pub ahead of print date: 22 December 2015
Published date: 1 March 2017
Keywords:
matching, assignment models, investments, nontransferableutility, graph theory
Organisations:
Economics
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Local EPrints ID: 360186
URI: http://eprints.soton.ac.uk/id/eprint/360186
ISSN: 0020-7276
PURE UUID: a8ba3153-1e8f-4937-91d7-8770589ded0c
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Date deposited: 27 Nov 2013 23:04
Last modified: 15 Mar 2024 03:46
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