We study a doctor-hospital matching market with contracts, where hos-

pitals can offer a range of contract terms to doctors. Surprisingly, expand-

ing the set of available terms can reduce doctors’ welfare without improving

the allocation for others. In contrast, our results suggest that limiting the

options available to doctors can lead to a Pareto improvement. We then

examine the necessary conditions on agents’ preferences to prevent reduc-

tions in doctors’ welfare. We demonstrate that only agent-lexicographic

preferences for all agents guarantee that no doctor experiences a decrease

in welfare when available terms are added.

JEL Classification: C78, D47, D71, D86.

Keywords: Matching with contracts; Stability; Adding terms; Welfare;

Agent-lexicographic preferences.