efficient, does not eliminate justified envy and does not respect improvements. We introduce a mechanism based on the matching …

-liability (JL) to individual liabil- ity (IL) lending models. This article tests a theory explaining this shift, focusing on … borrowers matching into groups exposed to similar economic shocks under JL, diminishing its effectiveness. I reconcile …

preferences exist, significantly decrease stability in matching markets, and are driven both by belief-based and preference …Matching markets can be unstable when individuals prefer to be matched to a partner who also wants to be matched with … them. Through a pre-registered and theory-guided laboratory experiment, we provide evidence that such reciprocal …

acceptance mechanism can achieve stability. These results provide insights into non-standard preferences in matching markets, and … paper, we introduce and formalize reciprocal preferences, apply them to matching markets, and analyze the implications for …