Application Costs and Congestion in Matching Markets

Bibliographic Data

ID9719846
AuthorsYingHua He (0000-0003-0551-1777, Rice University, USA & Toulouse School of Economics (TSE), Université de Toulouse Capitole , France), Thierry Magnac (Toulouse School of Economics (TSE), Université de Toulouse Capitole , France)
Year2022
Volume132
Issue648
Pages2918-2950
Publication date2022-11-07
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (PUBLISHER • GB)
DOI10.1093/ej/ueac038
OpenAlexW2924916067
LanguageEN
Citations received1
References cited39

A matching market often requires recruiting agents, or ‘programmes’, to costly screen ‘applicants’, and congestion increases with the number of applicants to be screened. We investigate the role of application costs: higher costs reduce congestion by discouraging applicants from applying to certain programmes; however, they may harm match quality. In a multiple-elicitation experiment conducted in a real-life matching market, we implement variants of the Gale-Shapley deferred-acceptance mechanism with different application costs. Our experimental and structural estimates show that a (low) application cost effectively reduces congestion without harming match quality

Business · Harm · Matching (statistics) · Quality (philosophy) · Risk analysis (engineering) · Auction Theory and Applications · Computer Science · Experimental Behavioral Economics Studies · Game Theory and Voting Systems · Psychology

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