ECON Seminar / Antonio Nicolo (Universita' di Padova)
Antonio Nicolo' will present the paper entitled “Rationalizable Behavior in Matching with Externalities” on Wednesday, 18th of March at 11:45 AM. The seminar will be physical at FASS 2054 but it can also be attended at the following link:
Rationalizable Behavior in Matching with Externalities (joint with Saulle and Salmaso)
In many matching problems, it is natural to assume that agents may have preferences not only over their own potential partners but also over the matches formed by others. Once such externalities are taken into account, the set of stable matchings depends on what agents believe would occur if they were to deviate.
We introduce a notion of preference-dependent beliefs, called rationalizable conjectures which parallels the notion of rationalizability in non-cooperative games. We define the set of rationalizable conjecturally stable matchings and show that it is always non empty. We also introduce the notion of rationalizable matchings and prove that every rationalizable conjecturally stable matching is indeed rationalizable. We show that rationalizability for matching is behaviorally implied by the epistemic condition of pairwise rationality and common belief in pairwise rationality, whereas rationalizable conjectural stability additionally requires belief correctness.
