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Stability with one-sided incomplete information

  • Author(s): Bikhchandani, Sushil
  • et al.
Abstract

Two notions of stability, ex ante stability and Bayesian stability, are investigated in a matching model with non-transferrable utility, interdependent preferences, and one-sided incomplete information. Ex ante stable matching-outcomes are unblocked for every belief on the blocking partner's type while Bayesian stable matching-outcomes are unblocked with respect to prior beliefs. Ex ante stability is a minimal requirement. Bayesian stability is a more selective desideratum with sound efficiency properties.

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