Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/193261
Authors: 
He, Yinghua
Magnac, Thierry
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers 11967
Abstract: 
Recruiting agents, or "programs" costly screen “applicants” in matching processes, and congestion in a market increases with the number of applicants to be screened. To combat this externality that applicants impose on programs, application costs can be used as a Pigouvian tax. 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.
Subjects: 
Gale-Shapley Deferred Acceptance Mechanism
costly preference formation
screening
stable matching
congestion
matching market place
JEL: 
D78
D47
D50
D61
I21
Document Type: 
Working Paper
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