Econometrica: Mar, 2014, Volume 82, Issue 2
Stable Matching With Incomplete Information
Qingmin Liu, George J. Mailath, Andrew Postlewaite, Larry Samuelson
We formulate a notion of stable outcomes in matching problems with one‐sided asymmetric information. The key conceptual problem is to formulate a notion of a blocking pair that takes account of the inferences that the uninformed agent might make. We show that the set of stable outcomes is nonempty in incomplete‐information environments, and is a superset of the set of complete‐information stable outcomes. We then provide sufficient conditions for incomplete‐information stable matchings to be efficient. Lastly, we define a notion of price‐sustainable allocations and show that the set of incomplete‐information stable matchings is a subset of the set of such allocations.
Supplement to "Stable Matching with Incomplete Information"
This appendix contains proofs not found within the manuscript.