September 4 (10:00-11:00) room C.510
Dinko Dimitrov (Saarland University, Germany)
Incomplete Information and Matching of Likes: A Mechanism Design Approach
We employ a mechanism design approach and study the implementability of stable matchings in a two sided market model with one sided incomplete information. Firms’ types are assumed to be publicly known, while workers’ types are private information. A mechanism generates a matching and additional announcements to the firms at each report profile of workers’ types. We show that, when agents’ preferences are increasing in the types of their matched partner, the assortative matching mechanism publicly announcing the entire set of reported types is incentive compatible. Moreover, any mechanism restricting the provided information up to firms’ lower contour sets of reported types is incentive compatible as well. The assortative matching fails to be implementable when we further reduce the provided information or allow for incompleteness of information on both sides of the market.
The talk is based on joint work with Dipjyoti Majumdar.