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Preferences and the price of stability in matching markets

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Author Info

  • James Boudreau

    ()

  • Vicki Knoblauch

    ()

Abstract

This 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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File URL: http://hdl.handle.net/10.1007/s11238-012-9319-2
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Bibliographic Info

Article provided by Springer in its journal Theory and Decision.

Volume (Year): 74 (2013)
Issue (Month): 4 (April)
Pages: 565-589

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Handle: RePEc:kap:theord:v:74:y:2013:i:4:p:565-589

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Web page: http://www.springerlink.com/link.asp?id=100341

Related research

Keywords: Price of stability; Matching; C78; D63; C63;

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References

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  1. Bettina Klaus & Flip Klijn, 2009. "Smith and Rawls Share a Room: Stability and Medians," Harvard Business School Working Papers 09-111, Harvard Business School.
  2. Roth, Alvin, 2008. "Deferred Acceptance Algorithms: History, Theory, Practice, and Open Questions," Scholarly Articles 2579651, Harvard University Department of Economics.
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  9. James W. Boudreau, 2008. "Preference Structure and Random Paths to Stability in Matching Markets," Working papers 2008-29, University of Connecticut, Department of Economics.
  10. Roth, Alvin E, 1984. "The Evolution of the Labor Market for Medical Interns and Residents: A Case Study in Game Theory," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 991-1016, December.
  11. Balinski, Michel & Sonmez, Tayfun, 1999. "A Tale of Two Mechanisms: Student Placement," Journal of Economic Theory, Elsevier, vol. 84(1), pages 73-94, January.
  12. Maskin, Eric, 1978. "A Theorem on Utilitarianism," Review of Economic Studies, Wiley Blackwell, vol. 45(1), pages 93-96, February.
  13. Bettina Klaus & Flip Klijn, 2004. "Fair and Efficient Student Placement with Couples," UFAE and IAE Working Papers 616.04, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC), revised 01 Mar 2006.
  14. Halaburda, Hanna, 2010. "Unravelling in two-sided matching markets and similarity of preferences," Games and Economic Behavior, Elsevier, vol. 69(2), pages 365-393, July.
  15. Bettina Klaus & Flip Klijn, 2004. "Median Stable Matching for College Admission," Working Papers 165, Barcelona Graduate School of Economics.
  16. James W. Boudreau & Vicki Knoblauch, 2010. "Marriage Matching and Intercorrelation of Preferences," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(3), pages 587-602, 06.
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Cited by:
  1. Boudreau, James W. & Knoblauch, Vicki, 2014. "What price stability? Social welfare in matching markets," Mathematical Social Sciences, Elsevier, vol. 67(C), pages 27-33.

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