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Paths to stability for college admissions with budget constraints

Author

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  • Azar Abizada

    (Azerbaijan Diplomatic Academy)

Abstract

We study two-sided matching problem considered in Abizada (Theor Econ 11(2), 735–756, 2016), where one side (colleges) can make monetary transfers (offer stipends) to the other (students) subject to budget constraints. Colleges have strict preferences over sets of students and value money only to the extent that it allows them to enroll better or additional students. A student can attend at most one college and receive a stipend from it. Each student has preferences over college-stipend bundles. Although in the presence of budget constraints, the conditions that are essential for most of the results on stability in the literature fail, Abizada (Theor Econ 11(2), 735–756, 2016) shows that for this model a pairwise stable allocation always exists. In this paper, we show that starting from an arbitrary allocation, there is a sequence of allocations, each allocation being obtained from the previous one by “satisfying” a blocking pair, such that the final allocation is pairwise stable.

Suggested Citation

  • Azar Abizada, 2017. "Paths to stability for college admissions with budget constraints," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(3), pages 879-890, August.
    • Handle: RePEc:spr:jogath:v:46:y:2017:i:3:d:10.1007_s00182-016-0564-4
    DOI: 10.1007/s00182-016-0564-4
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    References listed on IDEAS

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    More about this item

    Keywords

    Pairwise stability; Budget constraint; Path to stability;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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