Cooperation, competition, and welfare in a matching market

• 成果类型: Article
• 署名作者: Bester, Helmut; Sakovics, Jozsef
• 署名单位: Free University of Berlin; Humboldt University of Berlin; Universitat de les Illes Balears; University of Edinburgh
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2023.12.003
• 发表日期: 2024
• 页码: 357-369
• 关键词: cooperation; prisoner's dilemma; COMPETITION; welfare; matching; Trust building

摘要

We investigate the welfare effect of increasing competition in an anonymous two-sided matching market, where matched pairs play an infinitely repeated Prisoner's Dilemma. Higher matching efficiency is usually considered detrimental as it creates stronger incentives for defection. We point out, however, that a reduction in matching frictions also increases welfare because more agents find themselves in a cooperative relationship. We characterize the conditions for which increasing competition increases overall welfare. In particular, this is always the case when the incentives for defection are high.