TY  - RPRT
        AU  - He, Yinghua
AU  - Magnac, Thierry
        TI  - A Pigouvian Approach to Congestion in Matching Markets
        PY  - 2018/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 11967
        UR  - https://www.iza.org/publications/dp11967
        AB  - Recruiting agents, or "programs" costly screen “applicants” in matching processes, and congestion in a market increases with the number of applicants to be screened. To combat this externality that applicants impose on programs, application costs can be used as a Pigouvian tax. Higher costs reduce congestion by discouraging applicants from applying to certain programs; however, they may harm match quality. In a multiple-elicitation experiment conducted in a real-life matching market, we implement variants of the Gale-Shapley Deferred-Acceptance mechanism with different application costs. Our experimental and structural estimates show that a (low) application cost effectively reduces congestion without harming match quality.
        KW  - Gale-Shapley Deferred Acceptance Mechanism
KW  - costly preference formation
KW  - screening
KW  - stable matching
KW  - congestion
KW  - matching market place
        ER  -