Efficiency and Stability in Large Matching Markets

Yeon-Koo Che and Olivier Tercieux

No 2013, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

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.

Keywords: Large matching markets; Pareto efficiency; Stability; Fairness; Payoff equivalence; Asymptotic efficiency; and Asymptotic stability (search for similar items in EconPapers)
JEL-codes: C70 D47 D61 D63 (search for similar items in EconPapers)
Pages: 84 pages
Date: 2015-07
New Economics Papers: this item is included in nep-gth and nep-mic
Note: Includes supplementary material
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Efficiency and Stability in Large Matching Markets (2019)
Working Paper: Efficiency and Stability in Large Matching Markets (2019)
Working Paper: Efficiency and Stability in Large Matching Markets (2019)
Working Paper: Efficiency and Stability in Large Matching Markets (2015)
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