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This paper develops a price-theoretic framework for matching markets with heterogeneous preferences. The model departs …
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it as a two-stage game: A first stage of simultaneous 1-to-1 matching between firms and managers and a second stage of … each firm-manager pair to expect that the remaining agents will form a positive assortative matching (PAM), and the PAM on … the grand market is a stable matching under rational expectations. Even if they are strategic substitutes yet the …
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