Microeconomics: Welfare Economics & Collective Decision-Making eJournal | 2019
Incentives and Implementation in Marriage Markets with Externalities
Abstract
We study the implementability of stable correspondences in marriage markets with externalities. We prove that, contrary to what happens in markets without externalities, no stable revelation mechanism makes a dominant strategy for the agents on one side of the market to reveal their preferences. However, the stable correspondence in implementable in Nash equilibrium. JEL Codes:Economic Literature Classification Numbers: C72, C78, D62, D78. Key words: Marriage market with externalities; Incentives; Implementation.