Two-Sided Matching Problems with Externalities

Sasaki, Hiroo; Toda, Manabu

doi:10.1006/jeth.1996.0077

Cited by 132 publications

(149 citation statements)

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“…In some applications, the value of the match to a pair also depends on the entire matching, which gives rise to a problem with externalities. Sasaki and Toda (1996) and Pycia and Yenmez (2015) have analyzed matching with externalities, introducing notions of stability with externalities in both the perfect TU and NTU cases, and studying their implications. More recently, Chade and Eeckhout (2015) analyze the impact of externalities on the optimal and equilibrium matching patterns using a two-stage model of teams where teams are formed and later compete.…”

Section: Further Topicsmentioning

confidence: 99%

Sorting through Search and Matching Models in Economics

Chade

Eeckhout²,

Smith

2017

Journal of Economic Literature

154

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Toward understanding assortative matching, this is a self-contained introduction to research on search and matching. We first explore the nontransferable and perfectly transferable utility matching paradigms, and then a unifying imperfectly transferable utility matching model. Motivated by some unrealistic predictions of frictionless matching, we flesh out the foundational economics of search theory. We then revisit the original matching paradigms with search frictions. We finally allow informational frictions that often arise, such as in college-student sorting. (JEL C78, D82, D83, I23, J12)

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Section: Further Topicsmentioning

confidence: 99%

Sorting through Search and Matching Models in Economics

Chade

Eeckhout²,

Smith

2017

Journal of Economic Literature

154

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“…Consequently, most research has focused on identifying when stable matchings do and do not exist. Some papers have proceeded by constraining the matching problem through restrictions of the possible preference orderings, [3,7,11,12,15,17], while others have considered variations on the standard notion of stability [1,4,23]. Our paper also considers a restriction of the model which allows us to more easily characterize the class of stable matchings.…”

Section: Introductionmentioning

confidence: 99%

Peer Effects and Stability in Matching Markets

Bodine-Baron

Lee

Chong

et al. 2011

Lecture Notes in Computer Science

200

121

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Many-to-one matching markets exist in numerous different forms, such as college admissions, matching medical interns to hospitals for residencies, assigning housing to college students, and the classic firms and workers market. In the these markets, externalities such as complementarities and peer effects severely complicate the preference ordering of each agent. Further, research has shown that externalities lead to serious problems for market stability and for developing efficient algorithms to find stable matchings.In this paper we make the observation that peer effects are often the result of underlying social connections, and we explore a formulation of the many-to-one matching market where peer effects are derived from an underlying social network. Our model captures peer effects and complementarities using utility functions rather than traditional preference ordering. With this model and considering pairwise stability, we prove that stable matchings always exist and characterize the set of stable matchings in terms of social welfare. We also give distributed algorithms that are guaranteed to converge to a stable matching. To asses the competitive ratio of these algorithms and to more generally characterize the efficiency of matching markets with externalities, we prove general bounds on how far the welfare of the worst-case stable matching can be from the welfare of the optimal matching, and find that the structure of the social network (e.g. how well clustered the network is) plays a large role.

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“…Sophisticated expectations is one intuitively appealing estimation function that guarantees the existence of stable matchings. 10 …”

Section: Discussion Of Sophisticated Expectationsmentioning

confidence: 99%

“…But, as shown by Sasaki and Toda (1996), this may not be the case. The following example for n = 3 shows that the rational expectations estimation function does not guarantee the existence of stable matchings.…”

Section: Rational Expectationsmentioning

confidence: 96%

Stability of marriage with externalities

Hafalır

2008

Int J Game Theory

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In many matching problems, it is natural to consider that agents may have preferences not only over the set of potential partners but also over what other matches occur. Once such externalities are considered, the set of stable matchings will depend on what agents believe will happen if they deviate. In this paper, we introduce endogenously generated beliefs (which depend on the preferences). We introduce a particular notion of endogenous beliefs, called sophisticated expectations, and show that with these beliefs, stable matchings always exist.JEL Classi…cation Numbers: C71, C78, D62.

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Two-Sided Matching Problems with Externalities

Cited by 132 publications

References 0 publications

Sorting through Search and Matching Models in Economics

Sorting through Search and Matching Models in Economics

Peer Effects and Stability in Matching Markets

Stability of marriage with externalities

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