Strategic Delay in Dynamic Matching Markets

Abstract

Many matching markets between institutions and agents repeat periodically and new agents appear in each period. However, the agents appearing in some period may strategically delay their time of entering the markets. This will cause oversupply of agents in later periods so that the agents in later periods may also strategically delay their entry. We propose a model to study these kind of markets. We show that the incentive of delay can spread across periods. Although delay is the rational choice of individual agents, delay harms most agents and lowers their total welfare.