Author: Yeon-Koo ChePublisher:
ISBN:
Category :
Languages : en
Pages : 40
Book Description
Efficiency and Stability in Large Matching Markets
Author: Yeon-Koo CheOn the Efficiency of Stable Matchings in Large Markets
Author: SangMok LeePublisher:
ISBN:
Category :
Languages : en
Pages : 57
Book Description
Stability is often the goal for clearinghouses in matching markets, such as those matching residents to hospitals, students to schools, etc. Stable outcomes absent transfers need not be utilitarian efficient, suggesting the potential value of transfers. We study the wedge between stability and efficiency in large one-to-one matching markets. We show stable matchings are efficient asymptotically for a large class of preferences. In these environments, stability remains an appealing objective even on efficiency grounds, and monetary transfers are not necessary for efficiency purposes. Nonetheless, for severely imbalanced markets, when preferences entail sufficient idiosyncrasies, stable outcomes may be inefficient even asymptotically.
Algorithmic Game Theory
Author: Two-Sided Matching
Author: Alvin E. RothPublisher: Cambridge University Press
ISBN: 1107782430
Category : Business & Economics
Languages : en
Pages : 288
Book Description
Two-sided matching provides a model of search processes such as those between firms and workers in labor markets or between buyers and sellers in auctions. This book gives a comprehensive account of recent results concerning the game-theoretic analysis of two-sided matching. The focus of the book is on the stability of outcomes, on the incentives that different rules of organization give to agents, and on the constraints that these incentives impose on the ways such markets can be organized. The results for this wide range of related models and matching situations help clarify which conclusions depend on particular modeling assumptions and market conditions, and which are robust over a wide range of conditions. 'This book chronicles one of the outstanding success stories of the theory of games, a story in which the authors have played a major role: the theory and practice of matching markets ... The authors are to be warmly congratulated for this fine piece of work, which is quite unique in the game-theoretic literature.' From the Foreword by Robert Aumann
The Price of Stability in Matching Markets
Author: James W. BoudreauStability and Efficiency in Decentralized Two-sided Markets with Weak Preferences
Author: Radoslav S RaykovPublisher:
ISBN:
Category : Capital market
Languages : en
Pages : 36
Book Description
"Many decentralized markets are able to attain a stable outcome despite the absence of acentral authority. A stable matching, however, need not be efficient if preferences are weak. This raises the question whether a decentralized market with weak preferences can attain Pareto efficiency in the absence of a central matchmaker. I show that when agent tastes are independent, the random stable match in a large-enough market is asymptotically Pareto efficient even with weak preferences. In fact, even moderate-sized markets can attain good efficiency levels. The average fraction of agents who can Pareto improve is below 10% in a market of size n = 79 when one side of the market has weak preferences; when both sides have weak preferences, the inefficiency falls below 10% for n> 158. This implies that approximate Pareto efficiency is attainable in a decentralized market even in the absence of a central matchmaker"--Abstract, p. ii.
The Evolution of Core Stability in Decentralized Matching Markets
Author: H. Peyton YoungOnline and Matching-Based Market Design
Author: Federico EcheniquePublisher: Cambridge University Press
ISBN: 1108935052
Category : Computers
Languages : en
Pages : 722
Book Description
The rich, multi-faceted and multi-disciplinary field of matching-based market design is an active and important one due to its highly successful applications with economic and sociological impact. Its home is economics, but with intimate connections to algorithm design and operations research. With chapters contributed by over fifty top researchers from all three disciplines, this volume is unique in its breadth and depth, while still being a cohesive and unified picture of the field, suitable for the uninitiated as well as the expert. It explains the dominant ideas from computer science and economics underlying the most important results on market design and introduces the main algorithmic questions and combinatorial structures. Methodologies and applications from both the pre-Internet and post-Internet eras are covered in detail. Key chapters discuss the basic notions of efficiency, fairness and incentives, and the way market design seeks solutions guided by normative criteria borrowed from social choice theory.
Group Robust Stability in Matching Markets
Author: Mustafa Ogǔz AfacanEssays on Matching Theory and Behavioral Market Design
Author: Siqi PanPublisher:
ISBN:
Category : Economics
Languages : en
Pages : 112
Book Description
This dissertation focuses on the design and implementation of matching markets where transfers are not available, such as college admissions, school choice, and certain labor markets. The results contribute to the literature from both a theoretical and a behavioral perspective, and may have policy implications for the design of some real-life matching markets. Chapter 1, “Exploding Offers and Unraveling in Two-Sided Matching Markets,” studies the unraveling problem prevalent in many two-sided matching markets that occurs when transactions become inefficiently early. In a two-period decentralized model, I examine whether the use of exploding offers can affect agents' early moving incentives. The results show that when the culture of the market allows firms to make exploding offers, unraveling is more likely to occur, leading to a less socially desirable matching outcome. A market with an excess supply of labor is less vulnerable to the presence of exploding offers; yet the conclusion is ambiguous for a market with a greater degree of uncertainty in early stages, which depends on the specific information structure. While a policy banning exploding offers tends to be supported by high quality firms and workers, it can be opposed by those of lower quality. This explains the prevalence of exploding offers in practice. Chapter 2, “Constrained School Choice and Information Acquisition,” investigates a common practice of many school choice programs in the field, where the length of students' submitted preference lists are constrained. In an environment where students have incomplete information about others’ preferences, I theoretically study the effect of such a constraint under both a Deferred Acceptance mechanism (DA) and a Boston mechanism (BOS). The result shows that ex-ante stability can only be ensured under an unconstrained DA, but not under a constrained DA, an unconstrained BOS, or a constrained BOS. In a lab experiment, I find that the constraint also affects students’ information acquisition behavior. Specifically, when faced with a constraint, students tend to acquire less wasteful information and distribute more efforts to acquire relevant information under DA; such an effect is not significant under BOS. Overall, the constraint has a negative effect on efficiency and stability under both mechanisms. Chapter 3, “Targeted Advertising on Competing Platforms,” is jointly written with Huanxing Yang. We investigate targeted advertising in two-sided markets. Each of the two competing platforms has single-homing consumers on one side and multi-homing advertising firms on the other. We focus on how asymmetry in platforms’ targeting abilities translates into asymmetric equilibrium outcomes, and how changes in targeting ability affect the price and volume of ads, consumer welfare, and advertising firms' profits. We also compare social incentives and equilibrium incentives in investing in targeting ability. Chapter 4, “The Instability of Matching with Overconfident Agents: Laboratory and Field Investigations,” focuses on centralized college admissions markets where students are evaluated and allocated based on their performance on a standardized exam. A single exam’s measurement error causes the exam-based priorities to deviate from colleges' aptitude-based preferences: a student who underperforms in one exam may lose her placement at a preferred college to someone with a lower aptitude. The previous literature proposes a solution of combining a Boston algorithm with pre-exam preference submission. Under the assumption that students have perfect knowledge of their relative aptitudes before taking the exam, the suggested mechanism intends to trigger a self-sorting process, with students of higher (lower) aptitudes targeting more (less) preferred colleges. However, in a laboratory experiment, I find that such a self-sorting process is skewed by overconfidence, which leads to a welfare loss larger than the purported benefits. Moreover, the mechanism introduces unfairness by rewarding overconfidence and punishing underconfidence, thus serving as a gender penalty for women. I also analyze field data from Chinese high schools; the results suggest similar conclusions as in the lab.