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Truthtelling in Matching Markets

Truthtelling in Matching Markets We analyze a search and matching model with non‐transferable utility and asymmetric information. Randomly paired agents go through an evaluation phase, at the end of which they discover each other's types and choose to match or not. Before deciding to enter this phase, agents can communicate through cheap talk. We provide conditions for this communication to be informative, and we examine how it affects agents' welfare. We show that communication is Pareto‐improving only when the matching is assortative in the absence of communication and left unchanged by information transmission. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Scandinavian Journal of Economics Wiley

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References (55)

Publisher
Wiley
Copyright
© 2017 The editors of The Scandinavian Journal of Economics.
ISSN
0347-0520
eISSN
1467-9442
DOI
10.1111/sjoe.12203
Publisher site
See Article on Publisher Site

Abstract

We analyze a search and matching model with non‐transferable utility and asymmetric information. Randomly paired agents go through an evaluation phase, at the end of which they discover each other's types and choose to match or not. Before deciding to enter this phase, agents can communicate through cheap talk. We provide conditions for this communication to be informative, and we examine how it affects agents' welfare. We show that communication is Pareto‐improving only when the matching is assortative in the absence of communication and left unchanged by information transmission.

Journal

The Scandinavian Journal of EconomicsWiley

Published: Oct 1, 2017

Keywords: ; ; ; ; ; ; ;

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