Imperfect Social Learning on Matching Markets Implications for Stability

This dissertation introduces bounded rationality on matching markets,by way of imperfect cognition in social learning. On a two-sided agent-agent one-to-one matching market with Beckerian match utilities though forbidding transfers, a Live-Polarised-Unidimensional-Valuation (LPUV) rational agent m observes the surplus that a potential partner f is currently generating with her own match and uses it as an estimate of the surplus they (m and f) would jointly generate. The agent plugs this incorrect estimate of the surplus into the correct splitting rule, hence a coarse belief on match utilities. I compare the implicitly defined LPUV-stability to the usual(Gale-Shapley) stability concept, under odd or specific splitting rules, exogenous or endogenous surpluses. Quite remarkably, there exist splitting systems for which LPUV-stability is robust to the specification of surpluses. In addition, LPUV-stable matchings are disproportionately assortative with respects to GS-stable ones