Advertisement

International Journal of Game Theory

, Volume 42, Issue 4, pp 835–844 | Cite as

Matching and price competition: beyond symmetric linear costs

  • Julio González-Díaz
  • Ron SiegelEmail author
Article

Abstract

Bulow and Levin’s (2006) “Matching and Price Competition” studies a matching model in which hospitals compete for interns by offering wages. We relax the assumption of symmetric linear costs and compare the pricing equilibrium that results to the firm-optimal competitive equilibrium. With linear and asymmetric costs, competition in the pricing equilibrium may not be localized, but all other qualitative comparisons of Bulow and Levin (2006) hold. With non-linear and symmetric costs workers’ average utility in the pricing equilibrium may be higher than in the firm- optimal competitive equilibrium. With asymmetric and non-linear costs, firms need not choose scores from an interval in a pricing equilibrium, which may make competition even less localized.

Keywords

Matching Asymmetric non-linear costs All-pay contest Pricing equilibrium Competitive equilibrium 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Artemov G (2008) Matching and price competition: would personalized prices help?. Int J Game Theory 36(3–4): 321–331CrossRefGoogle Scholar
  2. Barut Y, Kovenock D (1998) The symmetric multiple prize all-pay auction with complete information. Eur J Political Econ 14(4): 627–644CrossRefGoogle Scholar
  3. Bulow J, Levin J (2006) Matching and price competition. Am Econ Rev 96(3): 652–668CrossRefGoogle Scholar
  4. González-Díaz J (2012) First-price winner-takes-all contests. Optimization (forthcoming)Google Scholar
  5. Kojima F (2007) Matching and price competition: comment. Am Econ Rev 97(3): 1027–1031CrossRefGoogle Scholar
  6. Nierdele M (2007) First-price winner-takes-all contests. Am Econ Rev 97(5): 1957–1969CrossRefGoogle Scholar
  7. Siegel R (2009) All-pay contests. Econometrica 77(1): 71–92CrossRefGoogle Scholar
  8. Siegel R (2010) Asymmetric contests with conditional investments. Am Econ Rev 100(5): 2230–2260CrossRefGoogle Scholar
  9. Siegel R (2011) Head starts in contests. mimeoGoogle Scholar
  10. Xiao J (2011) Asymmetric all-pay contests with heterogeneous prizes. mimeoGoogle Scholar

Copyright information

© Springer-Verlag 2012

Authors and Affiliations

  1. 1.Department of Statistics and Operations ResearchUniversity of Santiago de CompostelaSantiago de CompostelaSpain
  2. 2.Department of EconomicsNorthwestern UniversityEvanstonUSA

Personalised recommendations