On Random Matching Markets: Properties and Equilibria
AbstractWe consider centralized matching markets in which, starting from an arbitrary match- ing, frms are successively chosen in a random fashion and offer their positions to the workers they prefer the most. We propose an algorithm that generalizes some well-known algorithms and explore some of its properties. In particular, different executions of the algorithm may lead to different output matchings. We then study incentives in the rev- elation game induced by the algorithm. We prove that ordinal equilibria always exist. Furthermore, every matching that results from an equilibrium play of the game is stable for a particular preference profile. Namely, if an ordinal equilibrium exists in which firms reveal their true preferences, only matchings that are stable for the true preferences can be obtained.
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Bibliographic InfoPaper provided by ISEG - School of Economics and Management, Department of Economics, University of Lisbon in its series Working Papers Department of Economics with number 2006/11.
Date of creation: 2006
Date of revision:
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Postal: Department of Economics, ISEG - School of Economics and Management, University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Web page: https://aquila1.iseg.ulisboa.pt/aquila/departamentos/EC
Matching Markets; Stability; Random Mechanism.;
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
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