Essays on Two-Sided Matching

Ph.D. Candidate Daniel Ripperger-Suhler of the Economics Department will be defending his dissertation titled, “Essays on Two-Sided Matching” on 05/04/2022.

The time and location of his dissertation defense is 10:00 am – 11:30 am, Virtual

Many thanks to Daniel’s dissertation committee: • Committee Chair –Konstantinos Serfes – Professor – Drexel University • Committee Member: Kaniska Dam - Professor – CIDE • Committee Member Mian Dai - Professor- Drexel University • Committee Member: Ricardo Serrano-Padial - Professor – Drexel University • Committee Member: Sebastien Bradley - Associate Professor – Drexel University

Abstract: This dissertation consists of three chapters that examine contracting problems in two-sided matching models. The first chapter studies use of syndication contracts in the venture capital matching market, and the resulting impact on portfolio company outcomes. A novel empirical model is developed to account for endogeneity issues due to matching between venture capitalists (VCs) and companies as well as the simultaneous causality bias coming from contract choice. The estimates show that unobserved company heterogeneity can lead to biased company outcome estimates, which can change over time due to changes in preferences over unobserved company characteristics. The second chapter, joint with Kaniska Dam and Konstantinos Serfes, explores the effect of incentives on choice of organizational structure, and the implications for the output distribution in two-sided matching model. A novel condition guaranteeing positive assortative matching (PAM) is derived for two-sided matching models with non-smooth bargaining frontiers. In the model, the choice between integrating and remaining separate results in a non-differentiable bargaining frontier and produces equilibria in which some matched pairs integrate, and others do not integrate. These equilibria produce drastically different output distributions and provide researchers with predictions that can be tested empirically. The final chapter considers a principal-agent model in which the agent can choose and exclusive contract with a single principal, or a non-exclusive contract with multiple principals at the cost of additional effort. The two-sided matching model shows that the endogenous outside option absent in a standard principal-agent model is necessary in order to generate certain equilibrium contract patterns. Finally, the model shows that changes in the costliness of additional effort by the agents has a non-montonic impact of agent utility.