Cyril Rouault (Université Paris-Saclay) – Contract Terms Monotonicity in Matching Markets

We study the impact of adding contract terms on stable allocations in the doctor-hospital matching market. Surprisingly, expanding term options can decrease doctors’ welfare at the doctor-optimal stable allocation, even if the added terms are utilized. Our results state that withdrawing unused terms can lead to a Pareto improvement for doctors. We prove that lexicographic preferences of doctors and hospitals prevent a decrease in doctors’ welfare when terms are added. However, in all other domains, adding terms can lead to a decrease in doctors’ welfare.