Cupid ’ s Invisible Hand : Social Surplus and Identification in Matching Models

  title={Cupid ’ s Invisible Hand : Social Surplus and Identification in Matching Models},
  author={Alfred Galichon and Bernard Salani{\'e}},
We investigate a model of one-to-one matching with transferable utility when some of the characteristics of the players are unobservable to the analyst. We allow for a wide class of distributions of unobserved heterogeneity, subject only to a separability assumption that generalizes Choo and Siow (2006). We first show that the stable matching maximizes a social gain function that trades o↵ exploiting complementarities in observable characteristic sand matching on unobserved characteristics. We… CONTINUE READING
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