For the Student: Matching and Economic Design

8 Pages Posted: 2 Mar 2012

See all articles by Georgy Artemov

Georgy Artemov

University of Melbourne - Department of Economics

Sven E. Feldmann

Melbourne Business School

Simon Loertscher

University of Melbourne - Department of Economics

Date Written: February 2012

Abstract

This article presents a brief survey of two‐sided matching. We introduce the reader to the problem of two‐sided matching in the context of the college admission model and explain two central requirements for a matching mechanism: stability and non‐manipulability. We show how the frequently used ‘Boston Mechanism’ fails these key requirements and describe how an alternative, the Deferred Acceptance Algorithm, leads to stable matchings but fails to be non‐manipulable in general. A third mechanism, the Top Trading Cycle, is efficient and non‐manipulable when only one side of the match acts strategically. We also discuss some applications of matching theory.

Suggested Citation

Artemov, Georgy and Feldmann, Sven E. and Loertscher, Simon, For the Student: Matching and Economic Design (February 2012). Australian Economic Review, Vol. 45, Issue 1, pp. 134-141, 2012. Available at SSRN: https://ssrn.com/abstract=2014526 or http://dx.doi.org/10.1111/j.1467-8462.2011.00666.x

Georgy Artemov (Contact Author)

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

Sven E. Feldmann

Melbourne Business School ( email )

200 Leicester Street
Carlton, Victoria 3053 3186
Australia
+61 3 9349 8171 (Phone)
+61 3 9349 8144 (Fax)

Simon Loertscher

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

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