Truthtelling in Matching Markets |
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| Authors: | Jeanne Hagenbach Frédéric Koessler Thomas Trégouët |
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| Affiliation: | 1. Ecole Polytechnique – CNRS, FR‐91128 Palaiseau, France;2. Paris School of Economics – CNRS, FR‐75014 Paris, France;3. Cergy‐Pontoise University, FR‐95011 Cergy‐Pontoise, France |
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| 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. |
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| Keywords: | Cheap talk marriage matching search C72 C78 D82 D83 J64 |
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