A Note on Bayesian Stability and Bayesian Efficiency

Abstract

In this paper, we extend the stability notion and Bayesian efficiency notion of Liu (2020) to local ones, as well as his result—that under certain intuitive conditions, stable matchings are Bayesian efficient—to an analogous one for local notions. Furthermore, the extended stability notion, and thus Liu’s notion, admits a decentralized foundation via an adaptive matching process.