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Stochastic Stability in Assignment Problems

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  • Bettina Klaus
  • Jonathan Newton

Abstract

In a dynamic model of assignment problems, small deviations suffice to move between stable outcomes. This result is used to obtain no-selection and almost-no-selection results under the stochastic stability concept for uniform and payoff-dependent errors. There is no-selection of partner or payoff under uniform errors, nor for agents with multiple optimal partners under payoff-dependent errors. There can be selection of payoff for agents with a unique optimal partner under payoff-dependent errors. However, when every agent has a unique optimal partner, almost-no-selection is obtained.

Suggested Citation

  • Bettina Klaus & Jonathan Newton, 2014. "Stochastic Stability in Assignment Problems," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 14.02, Université de Lausanne, Faculté des HEC, DEEP.
  • Handle: RePEc:lau:crdeep:14.02
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:labeco:v:47:y:2017:i:c:p:15-34 is not listed on IDEAS
    2. Huebener, Mathias & Kuger, Susanne & Marcus, Jan, 2017. "Increased instruction hours and the widening gap in student performance," Labour Economics, Elsevier, vol. 47(C), pages 15-34.
    3. Hwang, Sung-Ha & Lim, Wooyoung & Neary, Philip & Newton, Jonathan, 2016. "Conventional Contracts, Intentional behavior and Logit Choice: Equality Without Symmetry," Working Papers 2016-13, University of Sydney, School of Economics.
    4. Newton, Jonathan, 2017. "Shared intentions: The evolution of collaboration," Games and Economic Behavior, Elsevier, vol. 104(C), pages 517-534.
    5. Alós-Ferrer, Carlos & Buckenmaier, Johannes, 2017. "Trader matching and the selection of market institutions," Journal of Mathematical Economics, Elsevier, vol. 69(C), pages 118-127.
    6. repec:gam:jgames:v:7:y:2016:i:2:p:10:d:66888 is not listed on IDEAS
    7. Newton, Jonathan & Wait, Andrew & Angus, Simon D., 2016. "Watercooler chat, organizational structure and corporate culture," Working Papers 2016-03, University of Sydney, School of Economics.
    8. Heinrich H. Nax & Bary S. R. Pradelski, 2016. "Core Stability and Core Selection in a Decentralized Labor Matching Market," Games, MDPI, Open Access Journal, vol. 7(2), pages 1-16, March.

    More about this item

    Keywords

    Assignment problem; (core) stability; decentralization; stochastic stability;

    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
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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