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Preferences and the price of stability in matching markets

  • James Boudreau

    ()

  • Vicki Knoblauch

    ()

This paper studies welfare tradeoffs in two-sided, one-to-one matching markets. We begin by providing theoretical upper bounds on a utilitarian price of stability, and show that these bounds vary with the composition of participants’ ordinal preference lists. We then turn to simulation experiments to describe how changes in basic characteristics of agents’ preferences can increase or decrease the average price of stability as measured by both utilitarian and Rawlsian welfare criteria. Our results indicate that markets featuring moderate degrees of correlation and positive intercorrelation in the preferences of participants exhibit the steepest tradeoffs between stability and utilitarian welfare and between stability and Rawlsian welfare. Copyright Springer Science+Business Media New York 2013

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File URL: http://hdl.handle.net/10.1007/s11238-012-9319-2
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Article provided by Springer in its journal Theory and Decision.

Volume (Year): 74 (2013)
Issue (Month): 4 (April)
Pages: 565-589

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Handle: RePEc:kap:theord:v:74:y:2013:i:4:p:565-589
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100341

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  4. 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.
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  17. Chung-Piaw Teo & Jay Sethuraman & Wee-Peng Tan, 2001. "Gale-Shapley Stable Marriage Problem Revisited: Strategic Issues and Applications," Management Science, INFORMS, vol. 47(9), pages 1252-1267, September.
  18. James W. Boudreau & Vicki Knoblauch, 2008. "Marriage Matching and Intercorrelation of Preferences," Working papers 2008-27, University of Connecticut, Department of Economics.
  19. Onur Kesten, 2010. "School Choice with Consent," The Quarterly Journal of Economics, Oxford University Press, vol. 125(3), pages 1297-1348.
  20. Balinski, Michel & Sonmez, Tayfun, 1999. "A Tale of Two Mechanisms: Student Placement," Journal of Economic Theory, Elsevier, vol. 84(1), pages 73-94, January.
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