On the Survival of Some Unstable Two-Sided Matching Mechanisms: An Experimental and Computational Investigation of the Stability Hypothesis

40 Pages Posted: 16 Oct 2001

See all articles by M. Utku Ünver

M. Utku Ünver

Boston College - Department of Economics

Date Written: October 8, 2001

Abstract

We conduct a laboratory experiment and parallel computational adaptive agent simulations on unraveling of contract dates in two-sided matching markets inspired by the entry-level professional labor markets for medical interns in Britain. Experimental design consists of decentralized and mixed games, which adopt centralized mechanisms that have "successfully" or "unsuccessfully" been used in Britain to stop unraveling. The experiment uses an unsuccessful and unstable priority mechanism, a successful and unstable linear programming mechanism, and a successful and stable deferred acceptance mechanism (firm optimal stable mechanism). We study computational adaptive agent markets to model the learning in the experiment and to conjecture about robustness of experimental results. We find that the linear programming mechanism is not as successful as the deferred acceptance mechanism in preventing early contracts in the experiment although it performs better than the priority matching mechanism in terms of overall inefficiency.

Keywords: matching, stability, unraveling, linear programming, genetic algorithms, market experiments

JEL Classification: C92, C78, C63, I11, J44

Suggested Citation

Ünver, M. Utku, On the Survival of Some Unstable Two-Sided Matching Mechanisms: An Experimental and Computational Investigation of the Stability Hypothesis (October 8, 2001). Available at SSRN: https://ssrn.com/abstract=287140 or http://dx.doi.org/10.2139/ssrn.287140

M. Utku Ünver (Contact Author)

Boston College - Department of Economics ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

HOME PAGE: http://sites.bc.edu/utku-unver

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