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New Advances in Matching with Contracts

Paper Session

Saturday, Jan. 5, 2019 2:30 PM - 4:30 PM

Atlanta Marriott Marquis, International 10
Hosted By: American Economic Association
  • Chair: Larry Samuelson, Yale University

Matching with Complementary Contracts

Marzena Rostek
,
University of Wisconsin-Madison
Nathan Yoder
,
University of Georgia

Abstract

In this paper, we provide existence results for matching environments with complementarities, such as markets for patent licenses, differentiated products, or multi-sided platforms. Our results apply to both nontransferable and transferable utility settings, and allow for multilateral agreements and those with externalities. Additionally, we give comparative statics regarding the way primitive characteristics are combined to form the set of available contracts. These show the impact of various contract design decisions, such as the application of antitrust law to disallow patent cross-licenses, on stable outcomes.

Chain Stability in Trading Networks

John William Hatfield
,
University of Texas-Austin
Scott Duke Kominers
,
Harvard Business School
Alexandru Nichifor
,
University of Melbourne
Michael Ostrovsky
,
Stanford University
Alexander Westkamp
,
University of Cologne

Abstract

We show that in general trading networks with bilateral contracts, a suitably adapted chain stability concept (Ostrovsky, 2008) is equivalent to stability (Hatfield and Kominers, 2012; Hatfield et al., 2013) if all agents' preferences are fully substitutable and satisfy the Laws of Aggregate Supply and Demand. Furthermore, in the special case of trading networks with transferable utility, an outcome is consistent with competitive equilibrium if and only if it is not blocked by any chain of contracts.

Trading Networks with Frictions

Tamás Fleiner
,
Budapest University of Technology and Economics and Eötvös Loránd University
Ravi Jagadeesan
,
Harvard University
Zsuzsanna Jankó
,
Corvinus University
Alexander Teytelboym
,
University of Oxford

Abstract

We show how frictions and continuous transfers jointly affect equilibria in a model of matching in trading networks. Our model incorporates distortionary frictions such as transaction taxes, commissions, and bargaining costs. When contracts are fully substitutable for firms, competitive equilibria exist and coincide with outcomes that satisfy a cooperative solution concept called trail stability. However, competitive equilibria are generally neither stable nor Pareto-efficient.

Carpooling and the Economics of Self-Driving Cars

Michael Ostrovsky
,
Stanford University
Michael Schwarz
,
Microsoft

Abstract

We study the interplay between autonomous transportation, carpooling, and road pricing. We discuss how improvements in these technologies, and interactions among them, will affect transportation markets. Our main results show how to achieve socially efficient outcomes in such markets, taking into account the costs of driving, road capacity, and commuter preferences. An important component of the efficient outcome is the socially optimal matching of carpooling riders. Our approach shows how to set road prices and how to share the costs of driving and tolls among carpooling riders in a way that implements the efficient outcome.
Discussant(s)
Scott Duke Kominers
,
Harvard Business School
Ravi Jagadeesan
,
Harvard University
Larry Samuelson
,
Yale University
Edward L. Glaeser
,
Harvard University
JEL Classifications
  • D4 - Market Structure, Pricing, and Design
  • C7 - Game Theory and Bargaining Theory