Losing face
Losing face
When Al makes an offer to Betty that Betty observes and rejects, Al may suffer a painful and costly ‘loss of face’ (LoF). LoF can be avoided by letting the vulnerable side move second, or by setting up ‘Conditionally Anonymous Environments’ that only reveal when both parties say yes. This can impact bilateral matching problems, e.g., marriage markets, research partnering, and international negotiations. We model this assuming asymmetric information, continuous signals of individuals’ binary types, linear marriage production functions, and a primitive LoF term component to utility. LoF makes rejecting one’s match strictly preferred to being rejected, making the ‘high types always reject’ equilibrium stable. LoF may have non-monotonic effects on stable interior equilibria. A small LoF makes high types more selective, making marriage less common and more assortative. A greater LoF (for males only) makes low-type-males reverse snobs, which makes high-females less choosy, with ambiguous effects on the marriage rate.
164-190
Gall, Thomas
8df67f3d-fe3c-4a3f-8ce7-e2090557fcd4
Reinstein, David
4a665c8b-3e21-418a-8cd7-9f9c3979b0bd
1 January 2020
Gall, Thomas
8df67f3d-fe3c-4a3f-8ce7-e2090557fcd4
Reinstein, David
4a665c8b-3e21-418a-8cd7-9f9c3979b0bd
Gall, Thomas and Reinstein, David
(2020)
Losing face.
Oxford Economic Papers, 72 (1), .
(doi:10.1093/oep/gpz018).
Abstract
When Al makes an offer to Betty that Betty observes and rejects, Al may suffer a painful and costly ‘loss of face’ (LoF). LoF can be avoided by letting the vulnerable side move second, or by setting up ‘Conditionally Anonymous Environments’ that only reveal when both parties say yes. This can impact bilateral matching problems, e.g., marriage markets, research partnering, and international negotiations. We model this assuming asymmetric information, continuous signals of individuals’ binary types, linear marriage production functions, and a primitive LoF term component to utility. LoF makes rejecting one’s match strictly preferred to being rejected, making the ‘high types always reject’ equilibrium stable. LoF may have non-monotonic effects on stable interior equilibria. A small LoF makes high types more selective, making marriage less common and more assortative. A greater LoF (for males only) makes low-type-males reverse snobs, which makes high-females less choosy, with ambiguous effects on the marriage rate.
Text
Losing Face 2017
- Author's Original
Text
Losing Face 2018
- Accepted Manuscript
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Accepted/In Press date: 8 January 2019
e-pub ahead of print date: 15 March 2019
Published date: 1 January 2020
Identifiers
Local EPrints ID: 427678
URI: http://eprints.soton.ac.uk/id/eprint/427678
ISSN: 0030-7653
PURE UUID: 3efa5ed1-f74a-4f96-9d35-79e83e0e3fda
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Date deposited: 25 Jan 2019 17:30
Last modified: 16 Mar 2024 07:31
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Author:
David Reinstein
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