Strategic Decentralized Matching: The Effects of Information Frictions

Résumé

We study strategic interactions in decentralized matching markets, where firms make directed offers to workers and agents’ preferences are aligned. We show that stable outcomes can be achieved through decentralized interactions if either information frictions or time frictions exist independently. When both frictions are present, stable outcomes are attainable with sufficient richness of plausible preference profiles. However, unique implementation occurs under more stringent conditions on market interactions. Additionally, we demonstrate that strategic decentralized interactions lead to stability much faster than the naïve best-response dynamics that the literature has focused on.