Payoff Equivalence of Efficient Mechanisms in Large Matching Markets

Yeon-Koo Che and Olivier Tercieux

No 2015, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We study Pareto efficient mechanisms in matching markets when the number of agents is large and individual preferences are randomly drawn from a class of distributions, allowing for both common and idiosyncratic shocks. We show that, as the market grows large, all Pareto efficient mechanisms -- including top trading cycles, serial dictatorship, and their randomized variants -- are uniformly asymptotically payoff equivalent "up to the renaming of agents," yielding the utilitarian upper bound in the limit. This result implies that, when the conditions of our model are met, policy makers need not discriminate among Pareto efficient mechanisms based on the aggregate payoff distribution of participants.

Keywords: Large matching markets; Pareto efficiency; Payoff equivalence (search for similar items in EconPapers)
JEL-codes: C70 D47 D61 D63 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2015-07
New Economics Papers: this item is included in nep-gth and nep-net
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Related works:
Journal Article: Payoff equivalence of efficient mechanisms in large matching markets (2018)
Working Paper: Payoff Equivalence of Efficient Mechanisms in Large Matching Markets (2018)
Working Paper: Payoff Equivalence of Efficient Mechanisms in Large Matching Markets (2018)
Working Paper: Payoff Equivalence of Efficient Mechanisms in Large Matching Markets (2015)
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