Preferences and the price of stability in matching markets
AbstractThis paper studies welfare tradeoffs in two-sided, one-to-one matching markets. We begin by providing theoretical upper bounds on a utilitarian price of stability, and show that these bounds vary with the composition of participants’ ordinal preference lists. We then turn to simulation experiments to describe how changes in basic characteristics of agents’ preferences can increase or decrease the average price of stability as measured by both utilitarian and Rawlsian welfare criteria. Our results indicate that markets featuring moderate degrees of correlation and positive intercorrelation in the preferences of participants exhibit the steepest tradeoffs between stability and utilitarian welfare and between stability and Rawlsian welfare. Copyright Springer Science+Business Media New York 2013
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Bibliographic InfoArticle provided by Springer in its journal Theory and Decision.
Volume (Year): 74 (2013)
Issue (Month): 4 (April)
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Web page: http://www.springerlink.com/link.asp?id=100341
Price of stability; Matching; C78; D63; C63;
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
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