Envious Preferences in Two-sided Matching

We develop a model of two-sided matching problem with individual-sided envious preferences that originate from an emulative envy effect in which a more desirable state that is preferred is owned by the other individual. We assume envious preferences influence an individual’s decision to enter into a two-sided network instead of being unassigned. In this paper, we show that an individual-sided envious preference leads to a stable matching under a two-sided market framework. Applying the mechanism of the model to behavioral contract theory, we show that individual-proposing envious acceptance leads to stable farmer-buyer contract matching considering buyer’s time invariant preference. We further argue that individual’s envious preference also contributes to herd-type acceptance that dominates individual’s logical preferences in participation decision under a less risky environment.


Issue Date:
May 23 2016
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/235482
Total Pages:
12
JEL Codes:
D47; D81; D86; L14
Series Statement:
P8943




 Record created 2017-04-01, last modified 2017-04-26

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