Efficiency and stability of probabilistic assignments in marriage problems

Battal Dogan and Kemal Yildiz

Games and Economic Behavior, 2016, vol. 95, issue C, 47-58

Abstract: We study marriage problems where two groups of agents, men and women, match each other and probabilistic assignments are possible. When only ordinal preferences are observable, stochastic dominance efficiency (sd-efficiency) is commonly used. First, we provide a characterization of sd-efficient allocations in terms of a property of an order relation defined on the set of man–woman pairs. Then, using this characterization, we constructively prove that for each probabilistic assignment that is sd-efficient for some ordinal preferences, there is a von Neumann–Morgenstern utility profile consistent with the ordinal preferences for which the assignment is Pareto efficient. Second, we show that when the preferences are strict, for each ordinal preference profile and each ex-post stable probabilistic assignment, there is a von Neumann–Morgenstern utility profile, consistent with the ordinal preferences, for which the assignment belongs to the core of the associated transferable utility game.

Keywords: Marriage problems; Probabilistic assignment; Efficiency; Stability (search for similar items in EconPapers)
JEL-codes: C60 C71 C78 D61 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:95:y:2016:i:c:p:47-58

DOI: 10.1016/j.geb.2015.12.001

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