What price stability? Social welfare in matching markets

James Boudreau () and Vicki Knoblauch ()

Mathematical Social Sciences, 2014, vol. 67, issue C, 27-33

Abstract: In two-sided matching markets, stability can be costly. We define social welfare functions for matching markets and use them to formulate a definition of the price of stability. We then show that it is common to find a price tag attached to stability, and that the price of stability can be substantial. Therefore, when choosing a matching mechanism, a social planner would be well advised to weigh the price of stability against the value of stability, which varies from market to market.

Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:eee:matsoc:v:67:y:2014:i:c:p:27-33

DOI: 10.1016/j.mathsocsci.2013.09.004

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