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Transferable Utility Matching Beyond Logit: Computation and Estimation with General Heterogeneity

Author

Listed:
  • Alfred Galichon
  • Antoine Jacquet
  • Georgy Salakhutdinov

Abstract

We present a general framework for matching with transferable utility (TU) that accommodates arbitrary heterogeneity without relying on the logit structure. The optimal assignment problem is characterized by tractable linear programming formulation, allowing flexible error distributions and correlation patterns. We introduce an iterative algorithm that solves large-scale assignment problems with guaranteed convergence and an intuitive economic interpretation, and we show how the same structure supports a simulated moment-matching estimator of the systematic surplus. Experiments using simulated data demonstrate the algorithm's scalability and the estimator's consistency under correct specification, as well as systematic bias arising from logit misspecification.

Suggested Citation

  • Alfred Galichon & Antoine Jacquet & Georgy Salakhutdinov, 2025. "Transferable Utility Matching Beyond Logit: Computation and Estimation with General Heterogeneity," Papers 2511.23116, arXiv.org.
    • Handle: RePEc:arx:papers:2511.23116
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    References listed on IDEAS

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    3. Cristina Gualdani & Shruti Sinha, 2023. "Partial Identification in Matching Models for the Marriage Market," Post-Print hal-04232742, HAL.
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    5. Edoardo Ciscato, 2025. "Assessing Racial and Educational Segmentation in Large Marriage Markets," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 92(6), pages 3788-3839.
    6. McFadden, Daniel, 1989. "A Method of Simulated Moments for Estimation of Discrete Response Models without Numerical Integration," Econometrica, Econometric Society, vol. 57(5), pages 995-1026, September.
    7. Cristina Gualdani & Shruti Sinha, 2023. "Partial Identification in Matching Models for the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 131(5), pages 1109-1171.
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