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(In)visible Hands in Matching Markets

Author

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  • Alcalde, José

    () (IUDESP, University of Alicante)

Abstract

This paper explores sequential mechanisms for (many-to-one) two-sided matching problems. In these mechanisms, agents belonging to a side of the market determine an eligibility restriction; and the agents on the other side select their preferred mates, constrained by the above eligibility. We find out some asymmetries, as well as some coincidences, related to the mechanisms in which the first decision is made by the individuals or the institutions. In particular, for the two classes of mechanisms, it is likely that the outcome is stable. This can be interpreted as if the sequentiality in which agents decide takes the place of the coordination among the whole society. As a main difference, it is found that an extra coordination between individuals is exercised when they impose the eligibility restriction. A consequence of such an ‘over-coordination’ is that the likely outcome coincides with the individuals optimal stable matching. The dual result yielding the institutions’ optimal stable allocation does not hold when these agents are the ones to impose eligibility.

Suggested Citation

  • Alcalde, José, 2016. "(In)visible Hands in Matching Markets," QM&ET Working Papers 16-2, University of Alicante, D. Quantitative Methods and Economic Theory.
  • Handle: RePEc:ris:qmetal:2016_002
    as

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    References listed on IDEAS

    as
    1. Alcalde, Jose & Romero-Medina, Antonio, 2005. "Sequential decisions in the college admissions problem," Economics Letters, Elsevier, pages 153-158.
    2. Alcalde, Jose, 1996. "Implementation of Stable Solutions to Marriage Problems," Journal of Economic Theory, Elsevier, vol. 69(1), pages 240-254, April.
    3. Alcalde, Jose & Romero-Medina, Antonio, 2000. "Simple Mechanisms to Implement the Core of College Admissions Problems," Games and Economic Behavior, Elsevier, vol. 31(2), pages 294-302, May.
    4. Romero-Medina, Antonio & Triossi, Matteo, 2014. "Non-revelation mechanisms in many-to-one markets," Games and Economic Behavior, Elsevier, pages 624-630.
    5. Alcalde, Jose & Perez-Castrillo, David & Romero-Medina, Antonio, 1998. "Hiring Procedures to Implement Stable Allocations," Journal of Economic Theory, Elsevier, vol. 82(2), pages 469-480, October.
    6. Atila Abdulkadiroğlu & Parag A. Pathak & Alvin E. Roth & Tayfun Sönmez, 2005. "The Boston Public School Match," American Economic Review, American Economic Association, pages 368-371.
    7. Roth, Alvin E, 1984. "Stability and Polarization of Interests in Job Matching," Econometrica, Econometric Society, vol. 52(1), pages 47-57, January.
    8. Tayfun Sönmez & Tobias B. Switzer, 2013. "Matching With (Branch‐of‐Choice) Contracts at the United States Military Academy," Econometrica, Econometric Society, vol. 81(2), pages 451-488, March.
    9. Roth, Alvin E., 1985. "The college admissions problem is not equivalent to the marriage problem," Journal of Economic Theory, Elsevier, vol. 36(2), pages 277-288, August.
    10. Martinez, Ruth & Masso, Jordi & Neme, Alejandro & Oviedo, Jorge, 2000. "Single Agents and the Set of Many-to-One Stable Matchings," Journal of Economic Theory, Elsevier, vol. 91(1), pages 91-105, March.
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    More about this item

    Keywords

    Sequentiality; (Pairwise) Stability; Matching Markets;

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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