Matching with Multilateral Contracts
35 Pages Posted: 6 Jul 2017 Last revised: 6 Feb 2019
Date Written: February 4, 2019
In many matching environments, agreements are multilateral and/or have externalities. We show that stability in these environments depends on agents' aggregate choice behavior. Two different conditions on aggregate choice ensure a stable outcome exists. One applies when contracts are substitutes; the other ensures a unique stable outcome even without substitutability. Our results apply matching-theoretic techniques to environments where agents' interactions cannot be described by independent bilateral agreements, and also accommodate markets without a two-sided or supply chain structure. Our equivalent characterization of stability also makes computing stable outcomes easier, even in environments outside the scope of our existence results.
Keywords: Multilateral Matching, Externalities, Matching with Contracts, Stability
JEL Classification: C78, C62, D47, D85
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