Matching with myopic and farsighted players

P. Jean-Jacques Herings, Ana Mauleon, Vincent Vannetelbosch

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

We introduce the new notion of the pairwise myopic-farsighted stable set to study stable matchings under the assumption that players can be both myopic and farsighted. For the special case where all players are myopic, our concept predicts the set of matchings in the core. When all players are farsighted, we provide the characterization of pairwise myopic-farsighted stable sets: a set of matchings is a pairwise myopic-farsighted stable set if and only if it is a singleton consisting of a core element. This result confirms the result obtained by Mauleon et al. (2011) with a completely different effectivity function and provides a new special case where the farsighted stable set is absolutely maximal (Ray and Vohra, 2019) and coincides with the Strong Rational Expectations Farsighted Stable Set (Dutta and Vohra, 2017). When myopic and farsighted players interact, matchings outside the core can be stable and the most farsighted side can achieve its optimal stable matching.

Original languageEnglish
Article number105125
Pages (from-to)1-27
Number of pages27
JournalJournal of Economic Theory
Volume190
DOIs
Publication statusPublished - Nov 2020

Keywords

  • Marriage problems
  • Stable sets
  • Myopic and farsighted players
  • STABLE SETS
  • COALITION-FORMATION
  • STABILITY

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