Template-Type: ReDIF-Paper 1.0
Title: Decentralized Many-to-One Matching With Random Search
Author-Name: Günnur Ege Bilgin
Author-Email: ege.bilgin@uni-bonn.de

Classification-JEL: C78, D83
Keywords: many-to-one matching, decentralized matching, stability

Abstract: I analyze a canonical many-to-one matching market within a decentralized search model with
frictions, where a finite number of firms and workers meet randomly until the market clears. I
compare the stable matchings of the underlying market and equilibrium outcomes when time is
nearly costless. In contrast to the case where each firm has just a single vacancy, I show that stable
matchings are not obtained as easily. In particular, there may be no Markovian equilibrium that
uniformly implements either the worker- or the firm-optimal stable matching in every subgame.
The challenge results from the firms’ ability to withhold capacity strategically. Yet, this is not the
case for markets with vertical preferences on one side, and I construct the equilibrium strategy
profile that leads to the unique stable matching almost surely. Moreover, multiple vacancies enable
firms to implicitly collude and achieve unstable but firm-preferred matchings, even under Markovian
equilibria. Finally, I identify one sufficient condition on preferences to rule out such opportunities.

Note: 
Length: 42
Creation-Date: 2024-04
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp541
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2024_541