Premium
Matching With Complementary Contracts
Author(s) -
Rostek Marzena,
Yoder Nathan
Publication year - 2020
Publication title -
econometrica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 16.7
H-Index - 199
eISSN - 1468-0262
pISSN - 0012-9682
DOI - 10.3982/ecta16686
Subject(s) - comparative statics , matching (statistics) , mathematical economics , economics , externality , monotone polygon , transferable utility , operator (biology) , microeconomics , damages , point (geometry) , computer science , econometrics , mathematical optimization , game theory , mathematics , law , biochemistry , statistics , chemistry , geometry , repressor , political science , transcription factor , gene
In this paper, we show that stable outcomes exist in matching environments with complementarities, such as social media platforms or markets for patent licenses. Our results apply to both nontransferable and transferable utility settings, and allow for multilateral agreements and those with externalities. In particular, we show that stable outcomes in these settings are characterized by the largest fixed point of a monotone operator, and so can be found using an algorithm; in the nontransferable utility case, this is a one‐sided deferred acceptance algorithm, rather than a Gale–Shapley algorithm. We also give a monotone comparative statics result as well as a comparative static on the effect of bundling contracts together. These illustrate the impact of design decisions, such as increased privacy protections on social media, or the use of antitrust law to disallow patent pools, on stable outcomes.