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A perfectly robust approach to multiperiod matching problems

Author

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  • Kotowski, Maciej H.

Abstract

Many two-sided matching markets involve multiperiod interaction. Traditional cooperative solutions, such as pairwise stability or the core, often identify unintuitive outcomes (or are empty) when applied to such markets. As an alternative, this study proposes the criterion of perfect α-stability. An outcome is perfect α-stable if no coalition prefers an alternative assignment in any period that is superior for all plausible market continuations. The solution posits that agents have foresight, but cautiously evaluate possible future outcomes. A perfect α-stable matching exists, even when assignments are inter-temporal complements. The perfect α-core, a stronger solution, is nonempty under standard regularity conditions, such as history independence. Our analysis extends to markets with arrivals and departures, transfers, and many-to-one assignments.

Suggested Citation

  • Kotowski, Maciej H., 2024. "A perfectly robust approach to multiperiod matching problems," Journal of Economic Theory, Elsevier, vol. 222(C).
    • Handle: RePEc:eee:jetheo:v:222:y:2024:i:c:s002205312400125x
    DOI: 10.1016/j.jet.2024.105919
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    References listed on IDEAS

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    More about this item

    Keywords

    Matching; Two-sided market; Stability; Core;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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