IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2011.04400.html
   My bibliography  Save this paper

Bandits in Matching Markets: Ideas and Proposals for Peer Lending

Author

Listed:
  • Soumajyoti Sarkar

Abstract

Motivated by recent applications of sequential decision making in matching markets, in this paper we attempt at formulating and abstracting market designs for P2P lending. We describe a paradigm to set the stage for how peer to peer investments can be conceived from a matching market perspective, especially when both borrower and lender preferences are respected. We model these specialized markets as an optimization problem and consider different utilities for agents on both sides of the market while also understanding the impact of equitable allocations to borrowers. We devise a technique based on sequential decision making that allow the lenders to adjust their choices based on the dynamics of uncertainty from competition over time and that also impacts the rewards in return for their investments. Using simulated experiments we show the dynamics of the regret based on the optimal borrower-lender matching and find that the lender regret depends on the initial preferences set by the lenders which could affect their learning over decision making steps.

Suggested Citation

  • Soumajyoti Sarkar, 2020. "Bandits in Matching Markets: Ideas and Proposals for Peer Lending," Papers 2011.04400, arXiv.org, revised Aug 2023.
    • Handle: RePEc:arx:papers:2011.04400
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2011.04400
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alvin E. Roth & Uriel G. Rothblum & John H. Vande Vate, 1993. "Stable Matchings, Optimal Assignments, and Linear Programming," Mathematics of Operations Research, INFORMS, vol. 18(4), pages 803-828, November.
    2. Soumajyoti Sarkar & Hamidreza Alvari, 2020. "Mitigating Bias in Online Microfinance Platforms: A Case Study on Kiva.org," Papers 2006.12995, arXiv.org.
    3. Zaiyan Wei & Mingfeng Lin, 2017. "Market Mechanisms in Online Peer-to-Peer Lending," Management Science, INFORMS, vol. 63(12), pages 4236-4257, December.
    4. Roth, Alvin E & Sotomayor, Marilda, 1989. "The College Admissions Problem Revisited," Econometrica, Econometric Society, vol. 57(3), pages 559-570, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fleiner, Tamas, 2003. "On the stable b-matching polytope," Mathematical Social Sciences, Elsevier, vol. 46(2), pages 149-158, October.
    2. Roth, Alvin E. & Sonmez, Tayfun & Utku Unver, M., 2005. "Pairwise kidney exchange," Journal of Economic Theory, Elsevier, vol. 125(2), pages 151-188, December.
    3. Jay Sethuraman & Chung-Piaw Teo & Liwen Qian, 2006. "Many-to-One Stable Matching: Geometry and Fairness," Mathematics of Operations Research, INFORMS, vol. 31(3), pages 581-596, August.
    4. Pitchaya Wiratchotisatian & Hoda Atef Yekta & Andrew C. Trapp, 2022. "Stability Representations of Many-to-One Matching Problems: An Integer Optimization Approach," INFORMS Journal on Computing, INFORMS, vol. 34(6), pages 3325-3343, November.
    5. Paula Jaramillo & Çaǧatay Kayı & Flip Klijn, 2014. "On the exhaustiveness of truncation and dropping strategies in many-to-many matching markets," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(4), pages 793-811, April.
    6. Itai Ashlagi & Flip Klijn, 2012. "Manipulability in matching markets: conflict and coincidence of interests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 39(1), pages 23-33, June.
    7. Biermann, Florian M. & Naroditskiy, Victor & Polukarov, Maria & Nguyen, Tri-Dung & Rogers, Alex & Jennings, Nicholas R., 2014. "Task assignment with controlled and autonomous agents," Mathematical Social Sciences, Elsevier, vol. 71(C), pages 116-121.
    8. Adachi, Hiroyuki, 2000. "On a characterization of stable matchings," Economics Letters, Elsevier, vol. 68(1), pages 43-49, July.
    9. Yusuke Narita, 2021. "A Theory of Quasi-Experimental Evaluation of School Quality," Management Science, INFORMS, vol. 67(8), pages 4982-5010, August.
    10. Timothy Besley & Maitreesh Ghatak, 2017. "Profit with Purpose? A Theory of Social Enterprise," American Economic Journal: Economic Policy, American Economic Association, vol. 9(3), pages 19-58, August.
    11. Bettina Klaus & Flip Klijn, 2006. "Median Stable Matching for College Admissions," International Journal of Game Theory, Springer;Game Theory Society, vol. 34(1), pages 1-11, April.
    12. Alvin Roth, 2008. "Deferred acceptance algorithms: history, theory, practice, and open questions," International Journal of Game Theory, Springer;Game Theory Society, vol. 36(3), pages 537-569, March.
    13. Afacan, Mustafa Oǧuz, 2020. "Graduate admission with financial support," Journal of Mathematical Economics, Elsevier, vol. 87(C), pages 114-127.
    14. Amegashie, J.A. & Wu, X., 2004. "Self Selection in Competing All-Pay Auctions," Working Papers 2004-1, University of Guelph, Department of Economics and Finance.
    15. Jiequn Han & Ruimeng Hu & Jihao Long, 2020. "Convergence of Deep Fictitious Play for Stochastic Differential Games," Papers 2008.05519, arXiv.org, revised Mar 2021.
    16. Xing Wang & Niels Agatz & Alan Erera, 2018. "Stable Matching for Dynamic Ride-Sharing Systems," Transportation Science, INFORMS, vol. 52(4), pages 850-867, August.
    17. Kolos Csaba Ágoston & Péter Biró & Iain McBride, 2016. "Integer programming methods for special college admissions problems," Journal of Combinatorial Optimization, Springer, vol. 32(4), pages 1371-1399, November.
    18. Schlegel, Jan Christoph & Mamageishvili, Akaki, 2020. "Welfare theorems for random assignments with priorities," Games and Economic Behavior, Elsevier, vol. 124(C), pages 62-81.
    19. Shijun Chai & Li Zhou & Yang Chen, 2023. "Digital Finance and Entrepreneurial Return Rate: Effects, Mechanisms and Inequality," SAGE Open, , vol. 13(4), pages 21582440231, October.
    20. Sperisen, Benjamin & Wiseman, Thomas, 2020. "Too good to fire: Non-assortative matching to play a dynamic game," Games and Economic Behavior, Elsevier, vol. 124(C), pages 491-511.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2011.04400. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.