Contract terms monotonicity in matching markets

We study doctor–hospital matching markets with contracts, in which hospitals can offer a range of contract terms to doctors. We show that introducing new terms can reduce doctors' welfare, whereas withdrawing terms may generate a Pareto improvement. We establish the preference domains under which welfare is preserved and show that only agent‐lexicographic preferences for all agents ensure that no doctor is worse off when additional terms are introduced. Since this condition is rarely satisfied in practice, our results imply that most real‐world markets are vulnerable to welfare losses when the set of contract terms expands.