He, Yinghua and Magnac, Thierry (2022) Application Costs and Congestion in Matching Markets. The Economic Journal, vol. 132 (n° 648). pp. 2918-2950.

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Identification Number : 10.1093/ej/ueac038


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.

Item Type: Article
Language: English
Date: November 2022
Refereed: Yes
Uncontrolled Keywords: Gale-Shapley Deferred Acceptance Mechanism, Costly Preference Formation, Screening, Stable Matching, Congestion, Matching Market Design
JEL Classification: C78 - Bargaining Theory; Matching Theory
D50 - General
D61 - Allocative Efficiency; Cost-Benefit Analysis
I21 - Analysis of Education
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 18 Nov 2022 12:40
Last Modified: 08 Feb 2023 15:26
OAI Identifier: oai:tse-fr.eu:127505
URI: https://publications.ut-capitole.fr/id/eprint/46436

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