21,179 research outputs found

    Stable marriages and search frictions

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    Stable matchings are the primary solution concept for two-sided matching markets with nontransferable utility. We investigate the strategic foundations of stability in a decentralized matching market. Towards this end, we embed the standard marriage markets in a search model with random meetings. We study the limit of steady-state equilibria as exogenous frictions vanish. The main result is that convergence of equilibrium matchings to stable matchings is guaranteed if and only if there is a unique stable matching in the underlying marriage market. Whenever there are multiple stable matchings, sequences of equilibrium matchings converging to unstable, inefficient matchings can be constructed. Thus, vanishing frictions do not guarantee the stability and efficiency of decentralized marriage markets

    Moral Federalism

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    Many political issues like abortion, gay marriage or assisted suicide are strongly contested because individuals have preferences not only over their own choice but also about other individuals' actions. How should society decide these issues? This paper compares three regimes (centralization, decentralization and federalism) in an economy where individuals choose their residence and vote over a single-dimensional regulatory policy at the regional and national level. The main results are: (i) A move from decentralization to federalism, called moral federalism, is welfare improving behind the veil of ignorance if and only if centralization dominates decentralization, and (ii) for the group that favors a restrictive policy moral federalism is the more attractive the smaller its group size (subject to being the majority group), the larger the suffering from a given policy, and the smaller the regions' weight in determining the federal policy limit. The results are consistent with the Bush administration's attempt to restrict liberal policy choices at the state level after its narrow election victory in 2000.federalism, decentralization, Tiebout equilibrium, consumption externality, morals.

    Assortative Matching and the Education Gap

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    This paper attempts to explain the decrease and reversal of the education gap between males and females. Given a continuum of agents, the education decisions are modelled as an assignment game with endogenous types. In the first stage agents choose their education level and in the second they participate in the labor and marriage markets. Competition among potential matches ensures that the efficient education levels can always be sustained in equilibrium, but there may be inefficient equilibria. Combining asymmetries intrinsic to the modelled markets the model reproduces the observed education gap.Assortative matching, pre-marital investments, efficiency

    Assortative Matching and the Education Gap

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    This paper attempts to explain the decrease and reversal of the education gap between males and females. Given a continuum of agents, the education decisions are modelled as an assignment game with endogenous types. In the first stage agents choose their education level and in the second they participate in the labor and marriage markets. Competition among potential matches ensures that the efficient education levels can always be sustained in equilibrium, but there may be inefficient equilibria. Combining asymmetries intrinsic to the modelled markets the model reproduces the observed education gap.Assortative matching, efficiency, gender, education. Classification JEL:

    Adjusting Prices in the Many-to-many Assignment Game

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    Starting with an initial price vector, prices are adjusted in order to eliminate the demand excess and at the same time to keep the transfers to the sellers as low as possible. In each step of the auction, to which sellers should those transfers be made (minimal overdemanded sets) is the key definition in the description of the algorithm. Such approach was previously used by several authors. We introduce a novel distinction by considering multiple sellers owing multiple identical objects and multiple buyers with a quota greater than one consuming at most one unit of each seller’s good. This distinction induces a necessarily more complicated construction of the overdemanded sets than the constructions existing in the literature, even in the simplest case of additive utilities considered here. As the previous papers, our mechanism yields the minimum competitive equilibrium price vector. A procedure to find the maximum competitive equilibrium price vector is also provided.matching; stable payoff; competitive equilibrium payoff; optimal stable payoff; lattice social costs; pure comparative vigilance; super-symmetric rule

    A Measure to Compare Matchings in Marriage Markets

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    In matching markets the number of blocking pairs is often used as a criterion to compare matchings. We argue that this criterion is lacking an economic interpretation: In many circumstances it will neither reflect the expected extent of partner changes, nor will it capture the satisfaction of the players with the matching. As an alternative, we set up two principles which single out a particularly “disruptive” subcollection of blocking pairs. We propose to take the cardinality of that subset as a measure to compare matchings. This cardinality has an economic interpretation: the subset is a justified objection against the given matching according to a bargaining set characterization of the set of stable matchings. We prove multiple properties relevant for a workable measure of comparison.Stable Marriage Problem, Matching, Blocking Pair, Instability, Matching Comparison, Decentralized Market, Bargaining Set

    Backward Unraveling over Time: The Evolution of Strategic Behavior in the Entry-Level British Medical Labor Markets

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    This paper studies an adaptive artificial agent model using a genetic algorithm to analyze how a population of decision-makers learns to coordinate on the selection of an equilibrium or a social convention in a two-sided matching game. In the contexts of centralized and decentralized entry-level labor markets, evolution and adjustment paths of unraveling are explored using this model in an environment inspired by the Kagel and Roth (Quarterly Journal of Economics, 2000) experimental study. As an interesting result, it is demonstrated that stability need not be required for the success of a matching mechanism under incomplete information in the long run.Genetic algorithms, linear programming matching, stability, two-sided matching, unraveling

    The Collective Marriage Matching Model: Identification, Estimation and Testing

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    We develop and estimate an empirical collective model with endogenous marriage formation, participation, and family labor supply. Intra-household transfers arise endogenously as the transfers that clear the marriage market. The intra-household allocation can be recovered from observations on marriage decisions. Introducing the marriage market in the collective model allows us to independently estimate transfers from labor supplies and from marriage decisions. We estimate a semi-parametric version of our model using 2000 US Census data. Estimates of the model using marriage data are much more consistent with the theoretical predictions than estimates derived from labor supply.collective model, marriage matching, intrahousehold allocations

    A Research Agenda for Uncooperative Federalists

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    This paper was presented at the 2012 Legal Scholarship Symposium. The full video is available here

    On the Survival of Some Unstable Two-Sided Matching Mechanisms

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    In the 1960s, three types of matching mechanisms were adopted in regional entry-level British medical labor markets to prevent unraveling of contract dates. One of these categories of matching mechanisms failed to prevent unraveling. Roth (1991) showed the instability of that failing category. One of the surviving categories was unstable as well, and Roth concluded that features of the environments of these mechanisms are responsible for their survival. However, Ünver (2001) demonstrated that the successful yet unstable mechanisms performed better in preventing unraveling than the unsuccessful and unstable category in an artificial-adaptive-agent-based economy. In this paper, we conduct a human subject experiment in addition to short- and long-run artificial agent simulations to understand this puzzle. We find that both the unsuccessful and unstable mechanism and the successful and unstable mechanism perform poorly in preventing unraveling in the experiment and in short-run simulations, while long-run simulations support the previous Ünver finding.
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