Abstract

http://ssrn.com/abstract=2394319
 


 



Dynamic Matching Market Design


Mohammad Akbarpour


Stanford University - Department of Economics

Shengwu Li


Stanford University - Department of Economics

Shayan Oveis Gharan


University of California, Berkeley

February 1, 2014


Abstract:     
We introduce a simple benchmark model of dynamic matching in networked markets, where agents arrive and depart stochastically and the network of acceptable transactions among agents forms a random graph. We analyze our model from three perspectives: waiting, optimization, and information. The main insight of our analysis is that waiting to thicken the market can be substantially more important than increasing the speed of transactions, and this is quite robust to the presence of waiting costs. From an optimization perspective, naive local algorithms, that choose the right time to match agents but do not exploit global network structure, can perform very close to optimal algorithms. From an information perspective, algorithms that employ even partial information on agents' departure times perform substantially better than those that lack such information. To elicit agents' departure times, we design an incentive-compatible continuous-time dynamic mechanism without transfers.

Number of Pages in PDF File: 57

Keywords: Market Design, Matching, Networks, Continuous-time Markov Chains, Mechanism Design

JEL Classification: D47, C78, C60

working papers series





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Date posted: February 15, 2014 ; Last revised: February 16, 2014

Suggested Citation

Akbarpour, Mohammad and Li, Shengwu and Oveis Gharan, Shayan, Dynamic Matching Market Design (February 1, 2014). Available at SSRN: http://ssrn.com/abstract=2394319 or http://dx.doi.org/10.2139/ssrn.2394319

Contact Information

Mohammad Akbarpour (Contact Author)
Stanford University - Department of Economics ( email )
Landau Economic Building
579 Serra Mall
Stanford, CA 94305
United States
HOME PAGE: http://www.stanford.edu/~mohamwad
Shengwu Li
Stanford University - Department of Economics ( email )
Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States
HOME PAGE: http://www.stanford.edu/~shengwu/
Shayan Oveis Gharan
University of California, Berkeley ( email )
Berkeley, CA
United States
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