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The unreasonable effectiveness of optimal transport in economics

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  • Alfred Galichon

Abstract

Optimal transport has become part of the standard quantitative economics toolbox. It is the framework of choice to describe models of matching with transfers, but beyond that, it allows to: extend quantile regression; identify discrete choice models; provide new algorithms for computing the random coefficient logit model; and generalize the gravity model in trade. This paper offer a brief review of the basics of the theory, its applications to economics, and some extensions.

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  • Alfred Galichon, 2021. "The unreasonable effectiveness of optimal transport in economics," Papers 2107.04700, arXiv.org.
  • Handle: RePEc:arx:papers:2107.04700
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    References listed on IDEAS

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    Cited by:

    1. Alfred Galichon & Larry Samuelson & Lucas Vernet, 2022. "Monotone Comparative Statics for Equilibrium Problems," Papers 2207.06731, arXiv.org.

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