Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Evolution of Core Stability in Decentralized Matching Markets

Contents:

Author Info

  • Heinrich H. Nax

    (Paris School of Economics)

  • Bary S. R. Pradelski

    (University of Oxford, Oxford-Man Institute)

  • H. Peyton Young

    (University of Oxford)

Registered author(s):

    Abstract

    Decentralized matching markets on the internet allow large numbers of agents to interact anonymously at virtually no cost. Very little information is available to market participants and trade takes place at many different prices simultaneously. We propose a decentralized, completely uncoupled learning process in such environments that leads to stable and efficient outcomes. Agents on each side of the market make bids for potential partners and are matched if their bids are mutually profitable. Matched agents occasionally experiment with higher bids if on the buy-side (or lower bids if on the sell-side), while single agents, in the hope of attracting partners, lower their bids if on the buy-side (or raise their bids if on the sell-side). This simple and intuitive learning process implements core allocations even though agents have no knowledge of other agents' strategies, payoffs, or the structure of the game, and there is no central authority with such knowledge either.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.feem.it/userfiles/attach/20135291532464NDL2013-050.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2013.50.

    as in new window
    Length:
    Date of creation: May 2013
    Date of revision:
    Handle: RePEc:fem:femwpa:2013.50

    Contact details of provider:
    Postal: Corso Magenta, 63 - 20123 Milan
    Phone: 0039-2-52036934
    Fax: 0039-2-52036946
    Email:
    Web page: http://www.feem.it/
    More information through EDIRC

    Related research

    Keywords: Assignment Games; Cooperative Games; Core; Evolutionary Game Theory; Learning; Matching Markets;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. M. L. Balinski, 1965. "Integer Programming: Methods, Uses, Computations," Management Science, INFORMS, INFORMS, vol. 12(3), pages 253-313, November.
    2. Young, H. Peyton, 2009. "Learning by trial and error," Games and Economic Behavior, Elsevier, Elsevier, vol. 65(2), pages 626-643, March.
    3. Sergiu Hart & Andreu Mas-Colell, 2003. "Uncoupled Dynamics Do Not Lead to Nash Equilibrium," American Economic Review, American Economic Association, American Economic Association, vol. 93(5), pages 1830-1836, December.
    4. Kareen Rozen, 2008. "Conflict Leads to Cooperation in Nash Bargaining," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1641, Cowles Foundation for Research in Economics, Yale University, revised Jun 2009.
    5. Alvin E. Roth & Tayfun Sönmez & M. Utku Ünver, 2004. "Pairwise Kidney Exchange," Boston College Working Papers in Economics, Boston College Department of Economics 620, Boston College Department of Economics.
    6. Foster, Dean P. & Young, H. Peyton, 2006. "Regret testing: learning to play Nash equilibrium without knowing you have an opponent," Theoretical Economics, Econometric Society, Econometric Society, vol. 1(3), pages 341-367, September.
    7. Germano, Fabrizio & Lugosi, Gabor, 2007. "Global Nash convergence of Foster and Young's regret testing," Games and Economic Behavior, Elsevier, Elsevier, vol. 60(1), pages 135-154, July.
    8. Alvin E. Roth & Elliott Peranson, 1999. "The Redesign of the Matching Market for American Physicians: Some Engineering Aspects of Economic Design," NBER Working Papers 6963, National Bureau of Economic Research, Inc.
    9. Murali Agastia, . "Adaptive Play in Multiplayer Bargaining Situations," ELSE working papers 007, ESRC Centre on Economics Learning and Social Evolution.
    10. Kelso, Alexander S, Jr & Crawford, Vincent P, 1982. "Job Matching, Coalition Formation, and Gross Substitutes," Econometrica, Econometric Society, Econometric Society, vol. 50(6), pages 1483-1504, November.
    11. Newton, Jonathan, 2012. "Recontracting and stochastic stability in cooperative games," Journal of Economic Theory, Elsevier, Elsevier, vol. 147(1), pages 364-381.
    12. Karandikar, Rajeeva & Mookherjee, Dilip & Ray, Debraj & Vega-Redondo, Fernando, 1998. "Evolving Aspirations and Cooperation," Journal of Economic Theory, Elsevier, Elsevier, vol. 80(2), pages 292-331, June.
    13. Sotomayor, Marilda, 2003. "Some further remark on the core structure of the assignment game," Mathematical Social Sciences, Elsevier, Elsevier, vol. 46(3), pages 261-265, December.
    14. Crawford, Vincent P & Knoer, Elsie Marie, 1981. "Job Matching with Heterogeneous Firms and Workers," Econometrica, Econometric Society, Econometric Society, vol. 49(2), pages 437-50, March.
    15. Agastya, Murali, 1999. "Perturbed Adaptive Dynamics in Coalition Form Games," Journal of Economic Theory, Elsevier, Elsevier, vol. 89(2), pages 207-233, December.
    16. Demange, Gabrielle & Gale, David, 1985. "The Strategy Structure of Two-sided Matching Markets," Econometrica, Econometric Society, Econometric Society, vol. 53(4), pages 873-88, July.
    17. Demange, Gabrielle & Gale, David & Sotomayor, Marilda, 1986. "Multi-Item Auctions," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 94(4), pages 863-72, August.
    18. Arnold, Tone & Schwalbe, Ulrich, 2002. "Dynamic coalition formation and the core," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 49(3), pages 363-380, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2013.50. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (barbara racah).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.