On Random Matching Markets: Properties and Equilibria

Joana Pais ()

No 2006/11, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: We consider centralized matching markets in which, starting from an arbitrary match- ing, frms are successively chosen in a random fashion and offer their positions to the workers they prefer the most. We propose an algorithm that generalizes some well-known algorithms and explore some of its properties. In particular, different executions of the algorithm may lead to different output matchings. We then study incentives in the rev- elation game induced by the algorithm. We prove that ordinal equilibria always exist. Furthermore, every matching that results from an equilibrium play of the game is stable for a particular preference profile. Namely, if an ordinal equilibrium exists in which firms reveal their true preferences, only matchings that are stable for the true preferences can be obtained.

Keywords: Matching Markets; Stability; Random Mechanism. (search for similar items in EconPapers)
JEL-codes: C78 J44 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-gth
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Citations: View citations in EconPapers (4)

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