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Modeling Information, Access, and Choice in Two-Sided Markets

In many two-sided matching markets, an actor's available choices are limited by both the preferences of other actors in the system and information about the possible choices. In a job market, for example, the jobs available to a particular worker may be constrained by the preferences of the jobs for certain types of workers, by other workers occupying desired jobs, and knowledge about the availability of jobs.

We discuss the analysis of matching data coming from such markets, in which the data consist of characteristics of pairs of individuals, with one individual from each of two distinct populations (for example workers and jobs, or men and women in a marriage market). Our model for such data is based on Logan, Hoff, and Newton's (1999) parametric version of the two-sided matching model described in Roth and Sotomayer (1990), although we allow for the possibility that not all actors have information about one another. This extension may be useful when modeling markets in which the choices available to an individual are limited by geographic location or other constraints.