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Two-Sided Matching via Balanced Exchange: Tuition and Worker Exchanges

Author

Listed:
  • Umut Mert Dur

    () (Department of Economics, North Carolina State University)

  • M. Utku Unver

    () (Department of Economics, Boston College)

Abstract

We introduce a new matching model to mimic two-sided exchange programs such as tuition and worker exchange, in which each firm has to avoid being a net-exporter of workers. These exchanges use decentralized markets, making it difficult to achieve a balance between exports and imports. We show that stable equilibria discourage net-exporting firms from exchange. We introduce the two-sided top-trading-cycles mechanism that is balanced-efficient, worker-strategy-proof, acceptable, and individually rational, and respects priority bylaws regarding worker eligibility. We prove that it is the unique mechanism fulfilling these objectives. Moreover, it encourages exchange, since full participation is the dominant strategy for firms.

Suggested Citation

  • Umut Mert Dur & M. Utku Unver, 2015. "Two-Sided Matching via Balanced Exchange: Tuition and Worker Exchanges," Koç University-TUSIAD Economic Research Forum Working Papers 1508, Koc University-TUSIAD Economic Research Forum.
  • Handle: RePEc:koc:wpaper:1508
    as

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    File URL: http://eaf.ku.edu.tr/sites/eaf.ku.edu.tr/files/erf_wp_1508.pdf
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    References listed on IDEAS

    as
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    7. Gunter J. Hitsch & Ali Hortaçsu & Dan Ariely, 2010. "Matching and Sorting in Online Dating," American Economic Review, American Economic Association, pages 130-163.
    8. Tayfun Sönmez & Alvin E. Roth & M. Utku Ünver, 2007. "Efficient Kidney Exchange: Coincidence of Wants in Markets with Compatibility-Based Preferences," American Economic Review, American Economic Association, pages 828-851.
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    Citations

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    Cited by:

    1. Csoka, Péter & Herings, P. Jean-Jacques, 2016. "Decentralized Clearing in Financial Networks (RM/16/005-revised-)," Research Memorandum 037, Maastricht University, Graduate School of Business and Economics (GSBE).
    2. Csóka P. & Herings P.J.J., 2016. "Decentralized clearing in financial networks," Research Memorandum 005, Maastricht University, Graduate School of Business and Economics (GSBE).

    More about this item

    Keywords

    Market Design; Matching Theory; Tuition Exchange; Worker Exchange; Balanced Exchange; Two–sided Matching; Two–sided Top Trading Cycles.;

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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