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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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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
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  5. Atila Abdulkadiroglu & Parag A. Pathak & Alvin E. Roth & Tayfun Sönmez, 2006. "Changing the Boston School Choice Mechanism," Levine's Bibliography 122247000000001022, UCLA Department of Economics.
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  15. Bettina Klaus & Flip Klijn, 2009. "Smith and Rawls Share a Room: Stability and Medians," Harvard Business School Working Papers 09-111, Harvard Business School.
  16. Onur B. Celik & Vicki Knoblauch, 2007. "Marriage Matching with Correlated Preferences," Working papers 2007-16, University of Connecticut, Department of Economics.
  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. Sönmez, Tayfun & Pathak, Parag A. & Abdulkadiroglu, Atila & Roth, Alvin, 2005. "The Boston Public School Match," Scholarly Articles 2562764, Harvard University Department of Economics.
  19. Caldarelli, G. & Capocci, A., 2001. "Beauty and distance in the stable marriage problem," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 300(1), pages 325-331.
  20. Halaburda, Hanna, 2010. "Unravelling in two-sided matching markets and similarity of preferences," Games and Economic Behavior, Elsevier, vol. 69(2), pages 365-393, July.
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  23. Boudreau, James W. & Knoblauch, Vicki, 2014. "What price stability? Social welfare in matching markets," Mathematical Social Sciences, Elsevier, vol. 67(C), pages 27-33.
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