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Author: Timm Opitz Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
Agents with reciprocal preferences prefer to be matched to a partner who also likes to collaborate with them. In this paper, we introduce and formalize reciprocal preferences, apply them to matching markets, and analyze the implications for mechanism design. Formally, the preferences of an agent can depend on the preferences of potential partners and there is incomplete information about thepartners' preferences. We find that there is no stable mechanism in standard two-sided markets. Observing the final allocation of the mechanism enables agents to learn about each other's preferences, leading to instability. However, in a school choice setting with one side of the market being non-strategic, modified versions of the deferred acceptance mechanism can achieve stability. These results provide insights into non-standard preferences in matching markets, and their implications for efficient information and mechanism design.
Author: Timm Opitz Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
Agents with reciprocal preferences prefer to be matched to a partner who also likes to collaborate with them. In this paper, we introduce and formalize reciprocal preferences, apply them to matching markets, and analyze the implications for mechanism design. Formally, the preferences of an agent can depend on the preferences of potential partners and there is incomplete information about thepartners' preferences. We find that there is no stable mechanism in standard two-sided markets. Observing the final allocation of the mechanism enables agents to learn about each other's preferences, leading to instability. However, in a school choice setting with one side of the market being non-strategic, modified versions of the deferred acceptance mechanism can achieve stability. These results provide insights into non-standard preferences in matching markets, and their implications for efficient information and mechanism design.
Author: Peter Coles Publisher: ISBN: Category : Information theory in economics Languages : en Pages : 39
Book Description
Many labor markets share three stylized facts: employers cannot give full attention to all candidates, candidates are ready to provide information about their preferences for particular employers, and employers value and are prepared to act on this information. In this paper we study how a signaling mechanism, where each worker can send a signal of interest to one employer, facilitates matches in such markets. We find that introducing a signaling mechanism increases the welfare of workers and the number of matches, while the change in firm welfare is ambiguous. A signaling mechanism adds the most value for balanced markets.
Author: Natsumi Shimada Publisher: ISBN: Category : Languages : en Pages :
Book Description
We study an experiment of the students-proposing deferred acceptance mechanism (DA) in matching markets where firms are matched with students. We investigated the two different situations: (i) Students know firms' preferences and firms submit their true preference, (ii) Students know firms' preferences and firms submit a higher ranking to students who give them higher ranking. This experiment confirms that the matching results under DA in uence students' preference formation, which decreases the degree of stability. If firms do not submit their true preferences, students also do not submit their true preferences. As a result, the situation induces instability. Moreover, we find the new pattern of submitted preferences - compromise strategy. If there is an extreme option, students will tend to prefer the in-between option.
Author: Itai Ashlagi Publisher: ISBN: Category : Languages : en Pages : 58
Book Description
We study how to reduce congestion in two-sided matching markets with private preferences. We measure congestion by the number of bits of information that agents must (i) learn about their own preferences, and (ii) communicate with others before obtaining their final match. Previous results by Segal (2007) and Gonczarowski et al. (2015) suggest that a high level of congestion is inevitable under arbitrary preferences before the market can clear with a stable matching. We show that when the unobservable component of agent preferences satisfies certain natural assumptions, it is possible to recommend potential matches and encourage informative signals such that the market reaches a stable matching with a low level of congestion. This is desirable because the communication overhead is minimized while agents have negligible incentives to leave the marketplace or to look beyond the set of recommended partners. The main idea is to only recommend partners with whom the agent has a non-negligible chance of both liking and being liked by. The recommendations are based both on the observable component of preferences, and on the signals sent by agents on the other side that indicate interest.
Author: Andreas Zweifel Publisher: GRIN Verlag ISBN: 3640579380 Category : Business & Economics Languages : en Pages : 88
Book Description
Bachelor Thesis from the year 2009 in the subject Economics - Other, grade: 5.0, University of Zurich (Sozialökonomisches Institut (SOI)), language: English, abstract: Matching is the part of economics that deals with the question of who gets what, e.g. who gets which jobs, who goes to which university, who receives which organ or who marries whom. During the second part of the last century, many markets have been discovered to have failed in providing the necessary conditions for efficient matches. These market failures have partly evolved on ethical or institutional grounds, but are more generally attributed to congestion or coordination problems caused by the inability of the market to make it safe for participants to act on their private information. For this reason, a variety of allocation mechanisms have been developed and subsequently tested in field and laboratory experiments for possible implementation in real-world applications. This work attempts at giving a condensed review of different matching mechanisms and the performance of algorithms that have been implemented for solving the problems in their respective environments. The theoretical properties of these mechanisms as described in the increasingly vast literature on matching design will be used as a benchmark to compare their relative performance in terms of overall efficiency. The results yield some basic insights in the varying success of the competing algorithms in practice, indicating that both the quality of theoretical predictions and the actual performance of the algorithms decrease with the complexity of market environments. In particular, they show that imperfections of markets such as information asymmetry and incentive problems can have far-reaching consequences with respect to the effective working of matching procedures.
Author: Hanna Halaburda Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This paper investigates the causes and welfare consequences of unravelling in two-sided matching markets. It shows that similarity of preferences is an important factor driving unravelling. In particular, it shows that under the ex-post stable mechanism (the mechanism that the literature focuses on), unravelling is more likely to occur when participants have more similar preferences. It also shows that any Pareto-optimal mechanism must prevent unravelling, and that the ex-post stable mechanism is Pareto-optimal if and only if it prevents unravelling.
Author: Eduardo M. Azevedo Publisher: ISBN: Category : Languages : en Pages : 33
Book Description
This paper develops a price-theoretic framework for matching markets with heterogeneous preferences. The model departs from the standard Gale and Shapley (1962) model by assuming that a finite number of agents on one side (colleges or firms) are matched to a continuum mass of agents on the other side (students or workers). We show that stable matchings correspond to solutions of supply and demand equations, with the selectivity of each college playing a role similar to prices.We apply the model to an analysis of how competition induced by school choice gives schools incentives to invest in different aspects of quality. As another application, we characterize the asymptotics of school choice mechanisms.
Author: Timm Opitz
Author: Timm Opitz
Author: Peter Coles
Author: Nadja Stroh-Maraun
Author: Natsumi Shimada
Author: Itai Ashlagi
Author: Onur Burak Celik
Author: James W. Boudreau
Author: Andreas Zweifel
Author: Hanna Halaburda
Author: Eduardo M. Azevedo