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On the Importance of Relative Payoffs in Two-Sided Matching

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In a series of laboratory experiments, small groups of individuals who find themselves in an unequal pairwise-stable outcome tacitly form coalitions on one side of the market to protect or reject that outcome. The contribution of this work is in showing that relative payoffs play a role in two-sided matching markets; that in the lab, a same-side blocking coalition can form; and that the matching prescribed by deferred acceptance, by virtue of being highly asymmetric, may not survive same-side blocking coalitions. (JEL: D47, C78, C91)
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Keywords: laboratory experiments; market design; matching theory

Appeared or available online: February 1, 2019

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