On the Revealed Preference Analysis of Stable Aggregate Matchings

Thomas Demuynck and Umutcan Salman

No 2020-42, Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: We extend the analysis of (Echenique, Lee, Shum, and Yenmez, 2013) by looking at the testable revealed preference restrictions for stable aggregate matchings with non-transferable utility. We rephrase their revealed preference test in terms of a bipartite graph. From this, we obtain an simple condition that verifies whether a given matching is rationalisable. Next, for a matching that is not rationalisable, we show how to find the minimal number of matches that needs to be removed in order to restore rationalisability. This produces a goodness-of-fit measure that indicates how close a matching is to being rationalisable. We also show that the related problem of finding the minimal number of types that we need to remove in order to obtain rationalisability is NP-hard. We provide two illustrations to demonstrate the usefulness of our results.

Keywords: Revealed preference theory; com- putational complexity; stability; two-sided matching markets (search for similar items in EconPapers)
JEL-codes: C78 D11 (search for similar items in EconPapers)
Pages: 41 p.
Date: 2020-09
New Economics Papers: this item is included in nep-des and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: On the revealed preference analysis of stable aggregate matchings (2022)
Working Paper: On the Revealed Preference Analysis of Stable Aggregate Matchings (2022)
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