Individual Rationality Conditions of Identifying Matching Costs in Transferable Utility Matching Games
Abstract
As the widely applied method for measuring matching assortativeness in a transferable utility matching game, a matching maximum score estimation is proposed by fox2010qe. This article reveals that combining unmatched agents, transfers, and individual rationality conditions with sufficiently large penalty terms makes it possible to identify the coefficient parameter of a single common constant, i.e., matching costs in the market.
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