New Advances in Matching with Contracts
Saturday, Jan. 5, 2019 2:30 PM - 4:30 PM
- Chair: Larry Samuelson, Yale University
Chain Stability in Trading Networks
AbstractWe 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
AbstractWe 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
AbstractWe 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.
Scott Duke Kominers,
Harvard Business School
Edward L. Glaeser,
- D4 - Market Structure, Pricing, and Design
- C7 - Game Theory and Bargaining Theory