Two-Sided Matching via Balanced Exchange

Umut Dur and Utku Unver

No 815, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: We introduce a new matching model to mimic two-sided exchange programs such as tuition and worker exchanges, in which export-import balances are required for longevity of programs. These exchanges use decentralized markets, making it difficult to achieve this goal. We introduce the two-sided top-trading-cycles, the unique mechanism that is balanced-efficient, worker-strategy-proof, acceptable, individually rational, and respecting priority bylaws regarding worker eligibility. Moreover, it encourages exchange, because full participation is the dominant strategy for firms. We extend it to dynamic settings permitting tolerable yearly imbalances and demonstrate that its regular and tolerable versions perform considerably better than models of current practice.

Keywords: Market Design; Matching Theory; Tuition Exchange; Balanced Exchange; Two–sided Matching; Two–sided Top Trading Cycles (search for similar items in EconPapers)
JEL-codes: C71 C78 D71 D78 (search for similar items in EconPapers)
Date: 2012-11-25, Revised 2018-02-28
New Economics Papers: this item is included in nep-gth and nep-mic
Note: previously circulated as "Two-Sided Matching via Balanced Exchange: Tuition and Worker Exchanges"
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Forthcoming, Journal of Political Economy

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Journal Article: Two-Sided Matching via Balanced Exchange (2019)
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