Thickness and Information in Dynamic Matching Markets

63 Pages Posted: 15 Feb 2014 Last revised: 9 Jan 2019

See all articles by Mohammad Akbarpour

Mohammad Akbarpour

Stanford University

Shengwu Li

Harvard University - Society of Fellows

Shayan Oveis Gharan

University of California, Berkeley

Date Written: December 2018

Abstract

We introduce a simple model of dynamic matching in networked markets, where agents arrive and depart stochastically, and the composition of the trade network depends endogenously on the matching algorithm. Varying the timing properties of matching algorithms can substantially affect their performance, and this depends crucially on the information structure. More precisely, if the planner can identify agents who are about to depart, then waiting to thicken the market substantially reduces the fraction of unmatched agents. If the planner cannot identify such agents, then matching agents greedily is close-to-optimal. We specify conditions under which local algorithms that choose the right time to match agents, but do not exploit the global network structure, are close-to-optimal. Finally, we consider a setting where agents have private information about their departure times, and design a continuous-time dynamic mechanism to elicit this information.

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

JEL Classification: D47, C78, C60

Suggested Citation

Akbarpour, Mohammad and Li, Shengwu and Oveis Gharan, Shayan, Thickness and Information in Dynamic Matching Markets (December 2018). Available at SSRN: https://ssrn.com/abstract=2394319 or http://dx.doi.org/10.2139/ssrn.2394319

Mohammad Akbarpour (Contact Author)

Stanford University ( email )

Shengwu Li

Harvard University - Society of Fellows ( email )

Cambridge, MA
United States

Shayan Oveis Gharan

University of California, Berkeley ( email )

Berkeley, CA
United States

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