In the matching with contracts literature, three well-known conditions (from stronger to weaker)–substitutes, unilateral substitutes (US), and bilateral substitutes (BS)–have proven to be critical. This paper aims to deepen our understanding of them by separately axiomatizing the gap between...

This note shows that in the matching-with contracts model, the outcome of the cumulative offer process is order-independent if every hospital has a choice function that satisfies the bilateral substitutability condition and the irrelevance of rejected contracts condition.

In a bargaining setting with asymmetrically informed, inequity-averse parties, a fully efficient mechanism (i.e., the double auction) exists if and only if compassion is strong. Less compassionate parties do not trade in the double auction in the limit of strong envy.

According to Chang et al. (2013), social welfare under licensing is lower than under no-licensing if the R&D efficiency is high. We show that this result is not correct, as when R&D efficiency is high social welfare is higher under licensing than under no-licensing.

We investigate a two-part tariff licensing contract that enables an incumbent innovator to license the technology for a new product to a potential rival, who may alternatively develop a compatible technology for an imperfectly substitutable product. We identify the optimal two-part tariff...

We show that an outside innovator has a higher incentive to innovate than an incumbent innovator, by auctioning off his patent rights exclusively to an incumbent firm. For significant innovations this is also superior to selling licenses directly.

We compare dictator and impunity games. In impunity games, responders can reject offers but to no payoff consequence to proposers. Because proposers act under impunity, we should expect the same behavior across games, but experimentally observed behavior varies. Responders indeed exercise the...

This paper investigates the two-sided many-to-many matching problem, where every agent has max–min preference. The equivalence between the pairwise-stability and the setwise-stability is obtained. It is shown that the pairwise-stability implies the strong corewise-stability and the former may...

I show that bargaining impasse in Hörner and Vieille (2009) can be interpreted as the limit of bargaining delay: the maximal duration of the game increases unboundedly as the seller’s discount factor approaches the threshold level above which bargaining impasse occurs.

We provide a short proof for the following characterization of the core in housing markets first proved by Ma (1994): the core is the only rule that satisfies strategy-proofness, Pareto efficiency and individual rationality.