Yogurts Choose Consumers? Identification of Random Utility Models via Two-Sided Matching

52 Pages Posted: 9 Mar 2017  

Odran Bonnet

Sciences Po

Alfred Galichon

NYU, Department of Economics and Courant Institute

Keith O'Hara

New York University (NYU)

Matthew Shum

California Institute of Technology

Date Written: March 6, 2017

Abstract

In this paper we describe an equivalence between random utility discrete-choice models and two-sided matching models with imperfectly transferable utility, and we exploit its consequences. Based on it, we suggest new approaches for estimation and identification of non-additive random utility models (NARUM), in which the utility shocks do not affect decision-makers’ utilities in an additive manner. The estimation algorithms and procedures we describe are inspired by those in the matching literature. A noteworthy feature of our algorithms is that they yield the point estimate when the model is point identified, and yield the upper and lower bounds on the parameters under partial identification.

Keywords: Random Utility Models, Two-Sided Matching, Optimal Transport, Pure Characteristics Model, Deferred Acceptance, Partial Identification

JEL Classification: C51, C60

Suggested Citation

Bonnet, Odran and Galichon, Alfred and O'Hara, Keith and Shum, Matthew, Yogurts Choose Consumers? Identification of Random Utility Models via Two-Sided Matching (March 6, 2017). Available at SSRN: https://ssrn.com/abstract=2928876 or http://dx.doi.org/10.2139/ssrn.2928876

Odran Bonnet

Sciences Po ( email )

27 rue Saint-Guillaume
Paris Cedex 07, 75337
France

Alfred Galichon

NYU, Department of Economics and Courant Institute ( email )

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

Keith O'Hara

New York University (NYU) ( email )

Bobst Library, E-resource Acquisitions
20 Cooper Square 3rd Floor
New York, NY 10003-711
United States

Matthew Shum (Contact Author)

California Institute of Technology ( email )

Pasadena, CA 91125
United States

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