Work

Efficiency and Stability in Large Matching Markets

Year: 2018

Type: article

Abstract: We study efficient and stable mechanisms in matching markets when the number of agents is large and individuals’ preferences and priorities are drawn randomly. When agents’ preferences are uncorrelated, then both efficiency and stability can be achieved in an asymptotic sense via standard mechanisms such as deferred acceptance and top trading cycles. When agents’ preferences are correlated over objects, however, these mechanisms are either inefficient or unstable, even in an asymptotic sense. We propose a variant of deferred acceptance that is asymptotically efficient, asymptotically stable, and asymptotically incentive compatible. This new mechanism performs well in a counterfactual calibration based on New York City school choice data.

Source: Journal of Political Economy

DOI: 10.1086/701791

Authors: Yeon-Koo Che, Olivier Tercieux

Institutions: Columbia University, Centre National de la Recherche Scientifique, Paris School of Economics

Language: English

Topic: Game Theory and Voting Systems

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

Funder: Agence Nationale de la Recherche

Awards: Ecole d'Economie de Paris, Students assignments models: theory and applications