Paying to Match: Decentralized Markets with Information Frictions

We experimentally study decentralized one-to-one matching markets with transfers. vary the information available to participants, complete or incomplete, and surplus structure, supermodular submodular. Several insights emerge. First, while often culminate in efficient matchings, stability is more elusive, reflecting difficulty of arranging attendant Second, incomplete submodularity present hurdles efficiency especially stability; their combination drastically diminishes stability’s likelihood. Third, matchings form “from top down” complete-information markets, but exhibit many less-obviously ordered offers otherwise. Last, participants’ market positions matter far than dynamic bargaining styles for outcomes.