Citation

Discussion Paper Details

Please find the details for DP15082 in an easy to copy and paste format below:

Full Details

Title: Application Costs and Congestion in Matching Markets

Author(s): Yinghua He and Thierry Magnac

Publication Date: July 2020

Keyword(s): congestion, Costly Preference Formation, Gale-Shapley deferred acceptance mechanism, Matching Market Design, screening and Stable matching

Programme Area(s): Industrial Organization

Abstract: A matching market often requires recruiting agents, or ``programs,'' 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 programs; 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.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=15082

Bibliographic Reference

He, Y and Magnac, T. 2020. 'Application Costs and Congestion in Matching Markets'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=15082