Robust Matching for Teams

Daniel Owusu Adu () and Bahman Gharesifard ()
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Daniel Owusu Adu: University of Georgia
Bahman Gharesifard: University of California

Journal of Optimization Theory and Applications, 2024, vol. 200, issue 2, No 3, 523 pages

Abstract: Abstract We examine a hedonic model featuring uncertain production costs. The aim is to determine equilibrium prices and wages that facilitate the pairing of consumers with teams of producers, even when faced with the veil of uncertainty shrouding production costs. Using the framework of optimal transport theory, we identify the conditions sufficient for the existence of robust matching equilibrium. Our results show that under an additive uncertainty model for production costs, equilibrium can indeed be achieved, characterized by the expectation of the matching outcome under conditions of certainty. However, this model exhibits a twist of indeterminacy into the matching equilibrium. This departure from determinism is a distinctive feature, emphasizing the unique dynamics arising when uncertainty intersects with equilibrium-seeking mechanisms. To emphasize on this feature, we examine a special case which is related to martingale optimal transport. This case also underscores the complexity inherent in situations where uncertainty governs the equilibrium landscape. Altogether, our results offer a fresh perspective on matching scenarios marked by unpredictability in production costs.

Keywords: Matching problem; Optimal transport; Uncertainty; Optimization; 46N10; 91B06; 91B68 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10957-023-02349-3

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