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Analysis of Stochastic Matching Markets

  • Peter Biro

    ()

    (Institute of Economics - Hungarian Academy of Sciences)

  • Gethin Norman

    ()

    (School of Computing Science - University of Glasgow)

Suppose that the agents of a matching market contact each other randomly and form new pairs if is in their interest. Does such a process always converge to a stable matching if one exists? If so, how quickly? Are some stable matchings more likely to be obtained by this process than others? In this paper we are going to provide answers to these and similar questions, posed by economists and computer scientists. In the first part of the paper we give an alternative proof for the theorems by Diamantoudi et al. and Inarra et al. which implies that the corresponding stochastic processes are absorbing Markov chains. Our proof is not only shorter, but also provides upper bounds for the number of steps needed to stabilise the system. The second part of the paper proposes new techniques to analyse the behaviour of matching markets. We introduce the Stable Marriage and Stable Roommates Automaton and show how the probabilistic model checking tool PRISM may be used to predict the outcomes of stochastic interactions between myopic agents. In particular, we demonstrate how one can calculate the probabilities of reaching different matchings in a decentralised market and determine the expected convergence time of the stochastic process concerned. We illustrate the usage of this technique by studying some well-known marriage and roommates instances and randomly generated instances.

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Paper provided by Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences in its series IEHAS Discussion Papers with number 1132.

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Length: 22 pages
Date of creation: Jul 2011
Date of revision:
Handle: RePEc:has:discpr:1132
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  1. László Á. Kóczy & Luc Lauwers, 2002. "The Coalition Structure Core is Accessible," Center for Economic Studies - Discussion papers ces0219, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  2. E. Inarra & C. Larrea & E. Molis, 2008. "Random paths to P-stability in the roommate problem," International Journal of Game Theory, Springer, vol. 36(3), pages 461-471, March.
  3. Tayfun Sönmez & Suryapratim Banerjee & Hideo Konishi, 2001. "Core in a simple coalition formation game," Social Choice and Welfare, Springer, vol. 18(1), pages 135-153.
  4. Larrea Jaurrieta, María Concepción & Iñarra García, María Elena & Molis Bañales, Elena, 2007. "The Stability of the Roommate Problem Revisited," IKERLANAK 2007-30, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
  5. Peter Biro & Flip Klijn, 2011. "Matching with Couples: a Multidisciplinary Survey," IEHAS Discussion Papers 1139, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  6. James W. Boudreau, 2008. "Preference Structure and Random Paths to Stability in Matching Markets," Working papers 2008-29, University of Connecticut, Department of Economics.
  7. Bo Chen & Satoru Fujishige & Zaifu Yang, 2011. "Decentralized Market Processes to Stable Job Matchings with Competitive Salaries," Discussion Papers 11/03, Department of Economics, University of York.
  8. Klaus Bettina & Klijn Flip & Walzl Markus, 2008. "Stochastic Stability for Roommate Markets," Research Memorandum 010, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  9. Péter Biró & Katarína Cechlárová & Tamás Fleiner, 2008. "The dynamics of stable matchings and half-matchings for the stable marriage and roommates problems," International Journal of Game Theory, Springer, vol. 36(3), pages 333-352, March.
  10. Blum, Yosef & Roth, Alvin E. & Rothblum, Uriel G., 1997. "Vacancy Chains and Equilibration in Senior-Level Labor Markets," Journal of Economic Theory, Elsevier, vol. 76(2), pages 362-411, October.
  11. Fuhito Kojima & M. Ünver, 2008. "Random paths to pairwise stability in many-to-many matching problems: a study on market equilibration," International Journal of Game Theory, Springer, vol. 36(3), pages 473-488, March.
  12. Jinpeng Ma, 1996. "On randomized matching mechanisms (*)," Economic Theory, Springer, vol. 8(2), pages 377-381.
  13. Yang, Yi-You, 2011. "Accessible outcomes versus absorbing outcomes," Mathematical Social Sciences, Elsevier, vol. 62(1), pages 65-70, July.
  14. Blum, Yosef & Rothblum, Uriel G., 2002. ""Timing Is Everything" and Marital Bliss," Journal of Economic Theory, Elsevier, vol. 103(2), pages 429-443, April.
  15. Joana Pais & Agnes Pinter & Robert F. Veszteg, 2012. "Decentralized Matching Markets: A Laboratory Experiment," Working Papers Department of Economics 2012/08, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  16. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
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