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Matching with Trade-offs: Revealed Preferences over Competiting Characteristics

Author

Listed:
  • Alfred Galichon

    (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris)

  • Bernard Salanié

    (Columbia University [New York])

Abstract

We investigate in this paper the theory and econometrics of optimal matchings with competing criteria. The surplus from a marriage match, for instance, may depend both on the incomes and on the educations of the partners, as well as on characteristics that the analyst does not observe. The social optimum must therefore trade off matching on incomes and matching on educations. Given a exible specification of the surplus function, we characterize under mild assumptions the properties of the set of feasible matchings and of the socially optimal matching. Then we show how data on the covariation of the types of the partners in observed matches can be used to estimate the parameters that define social preferences over matches. We provide both nonparametric and parametric procedures that are very easy to use in applications.

Suggested Citation

  • Alfred Galichon & Bernard Salanié, 2010. "Matching with Trade-offs: Revealed Preferences over Competiting Characteristics," Working Papers hal-00473173, HAL.
    • Handle: RePEc:hal:wpaper:hal-00473173
    Note: View the original document on HAL open archive server: https://hal.science/hal-00473173
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    References listed on IDEAS

    as
    1. Federico Echenique, 2008. "What Matchings Can Be Stable? The Testable Implications of Matching Theory," Mathematics of Operations Research, INFORMS, vol. 33(3), pages 757-768, August.
    2. Chiappori, Pierre-André & Oreffice, Sonia & Quintana-Domeque, Climent, 2009. "Fatter Attraction: Anthropometric and Socioeconomic Characteristics in the Marriage Market," IZA Discussion Papers 4594, Institute of Labor Economics (IZA).
    3. Robert Shimer & Lones Smith, 2000. "Assortative Matching and Search," Econometrica, Econometric Society, vol. 68(2), pages 343-370, March.
    4. John William Hatfield & Paul R. Milgrom, 2005. "Matching with Contracts," American Economic Review, American Economic Association, vol. 95(4), pages 913-935, September.
    5. Gunter J. Hitsch & Ali Hortaçsu & Dan Ariely, 2010. "Matching and Sorting in Online Dating," American Economic Review, American Economic Association, vol. 100(1), pages 130-163, March.
    6. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-846, July-Aug..
    7. Eugene Choo & Aloysius Siow, 2006. "Who Marries Whom and Why," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 175-201, February.
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    More about this item

    Keywords

    matching; marriage; assignment.; assignment;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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