Abstract
This paper studies welfare tradeoffs in two-sided, one-to-one matching markets. We begin by providing theoretical upper bounds on a utilitarian price of stability, and show that these bounds vary with the composition of participants’ ordinal preference lists. We then turn to simulation experiments to describe how changes in basic characteristics of agents’ preferences can increase or decrease the average price of stability as measured by both utilitarian and Rawlsian welfare criteria. Our results indicate that markets featuring moderate degrees of correlation and positive intercorrelation in the preferences of participants exhibit the steepest tradeoffs between stability and utilitarian welfare and between stability and Rawlsian welfare.
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Boudreau, J.W., Knoblauch, V. Preferences and the price of stability in matching markets. Theory Decis 74, 565–589 (2013). https://doi.org/10.1007/s11238-012-9319-2
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DOI: https://doi.org/10.1007/s11238-012-9319-2