Publication: Take-it-or-leave-it contracts in many-to-many matching markets
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2018-01-23
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Abstract
We study a class of sequential non-revelation mechanisms through which hospitals make simultaneous
take-it-or-leave-it offers to doctors. The inclusion of contracts shrinks the set of equilibrium outcomes
and harms doctors more than hospitals, but it maintains the stability of the set of equilibrium outcomes.
Our analysis reveals the existence of a first-mover advantage that is absent from the model without
contracts. The mechanisms of this class are outcome equivalent and implement the set of stable
allocations in subgame perfect equilibrium when enough competitive pressure is present. Equilibrium
outcomes form a lattice when preferences are substitutable.
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Many-to-many, contracts, ultimatum games