Unravelling in two-sided matching markets and similarity of preferences

Hanna Halaburda

Games and Economic Behavior, 2010, vol. 69, issue 2, 365-393

Abstract: This paper investigates the causes and welfare consequences of unravelling in two-sided matching markets. It shows that similarity of preferences is an important factor driving unravelling. In particular, it shows that under the ex-post stable mechanism (the mechanism that the literature focuses on), unravelling is more likely to occur when participants have more similar preferences. It also shows that any Pareto-optimal mechanism must prevent unravelling, and that the ex-post stable mechanism is Pareto-optimal if and only if it prevents unravelling.

Keywords: Two-sided; matching; Unravelling; Similarity; of; preferences (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (24)

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Working Paper: Unravelling in Two-Sided Matching Markets and Similarity of Preferences (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:69:y:2010:i:2:p:365-393

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