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Stable and extremely unequal

Author

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  • Galichon, Alfred
  • Ghelfi, Octavia
  • Henry, Marc

Abstract

We show how stability as a solution concept in matching often comes at the cost of extreme forms on inequality. Restricting our attention to aligned preferences, we show that the stable matching results from the lexicographic welfare maximization of the pairs’ welfare, starting with the best-off. We compare this solution with an alternative allocation, that although unstable, maximizes the welfare lexicographically starting with the worst-off pairs.

Suggested Citation

  • Galichon, Alfred & Ghelfi, Octavia & Henry, Marc, 2023. "Stable and extremely unequal," Economics Letters, Elsevier, vol. 226(C).
    • Handle: RePEc:eee:ecolet:v:226:y:2023:i:c:s016517652300126x
    DOI: 10.1016/j.econlet.2023.111101
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    References listed on IDEAS

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    1. Clark Simon, 2006. "The Uniqueness of Stable Matchings," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 6(1), pages 1-28, December.
    2. Estelle Cantillon & Li Chen & Juan Sebastian Pereyra Barreiro, 2022. "Respecting priorities versus respecting preferences in school choice: When is there a trade-off ?," Working Papers ECARES 2022-39, ULB -- Universite Libre de Bruxelles.
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    5. Muriel Niederle & Leeat Yariv, 2009. "Decentralized Matching with Aligned Preferences," NBER Working Papers 14840, National Bureau of Economic Research, Inc.
    6. Tayfun Sönmez & Suryapratim Banerjee & Hideo Konishi, 2001. "Core in a simple coalition formation game," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(1), pages 135-153.
    7. Eeckhout, Jan, 2000. "On the uniqueness of stable marriage matchings," Economics Letters, Elsevier, vol. 69(1), pages 1-8, October.
    8. Itai Ashlagi & Yash Kanoria & Jacob D. Leshno, 2017. "Unbalanced Random Matching Markets: The Stark Effect of Competition," Journal of Political Economy, University of Chicago Press, vol. 125(1), pages 69-98.
    9. Muriel Niederle & Leeat Yariv, 2009. "Decentralized Matching with Aligned Preferences," Working Papers 2009-3, Princeton University. Economics Department..
    10. Estelle Cantillon & Li Chen & Juan S. Pereyra, 2022. "Respecting priorities versus respecting preferences in school choice: When is there a trade-off?," Papers 2212.02881, arXiv.org, revised Jan 2024.
    11. Marek Pycia, 2012. "Stability and Preference Alignment in Matching and Coalition Formation," Econometrica, Econometric Society, vol. 80(1), pages 323-362, January.
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    Cited by:

    1. Ortega, Josué & Klein, Thilo, 2023. "The cost of strategy-proofness in school choice," Games and Economic Behavior, Elsevier, vol. 141(C), pages 515-528.

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