Matching with Trade-Offs: Revealed Preferences Over Competing Characteristics

66 Pages Posted: 14 Oct 2009 Last revised: 24 Mar 2010

Alfred Galichon

NYU, Department of Economics and Courant Institute

Bernard Salanie

Columbia University - Graduate School of Arts and Sciences - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

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Date Written: March 22, 2009

Abstract

We investigate in this paper the theory and econometrics of optimal matchings with competing criteria. The surplus from a marriage match, for instance, may depend both on the incomes and on the educations of the partners, as well as on characteristics that the analyst does not observe.

The social optimum must therefore trade off matching on incomes and matching on educations. Given a flexible specification of the surplus function, we characterize under mild assumptions the properties of the set of feasible matchings and of the socially optimal matching. Then we show how data on the covariation of the types of the partners in observed matches can be used to estimate the parameters that define social preferences over matches. We provide both nonparametric and parametric procedures that are very easy to use in applications.

Keywords: Matching, Marriage, Assignment

JEL Classification: C78, D61, C13

Suggested Citation

Galichon, Alfred and Salanie, Bernard, Matching with Trade-Offs: Revealed Preferences Over Competing Characteristics (March 22, 2009). Available at SSRN: https://ssrn.com/abstract=1487307 or http://dx.doi.org/10.2139/ssrn.1487307

Alfred Galichon (Contact Author)

NYU, Department of Economics and Courant Institute ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States

Bernard Salanie

Columbia University - Graduate School of Arts and Sciences - Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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