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,...

This paper examine a class of two-sided matching problems with non-transferable utility. Agents are horizontally differentiated, and each would prefer to be matched with a similar partner; in short, “like attracts like”. Although such preferences imply a unique stable matching, the degree of...

This paper examines a class of two-sided matching problems with non-transferable utility. Agents are horizontally differentiated, and each would prefer to be matched to a similar partner, i.e. "like attracts like". such preferences imply a unique equilibrium assignment describing the pattern of...

In the presence of local public goods differences in tastes are an important determinant of the way in which partnerships are formed. Heterogeneity in tastes for private vs. public goods produces a tendency to positive assortment and partnerships of couples with similar tastes; heterogeneity in...