Revealed Preferences of One-Sided Matching

Abstract

I find the testable implications of the core in an exchange economy with unit demand when agents' preferences are unobserved. To do so, I develop a model of aggregate matchings in which the core is falsifiable; the identifying assumption is that agents' preferences are solely determined by observable characteristics. I find conditions that characterize when observed economies are compatible with the core. These conditions are meaningful, intuitive, and tractable, providing a nonparametric test for the core in the style of revealed preferences.