Stable Marriage with and Without Transferable Utility: Nonparametric Testable Implications

21 Pages Posted: 13 Oct 2017

See all articles by L. Cherchye

L. Cherchye

KU Leuven; Erasmus Research Institute of Management (ERIM)

Thomas Demuynck

Catholic University of Leuven (KUL) - Faculty of Business and Economics (FBE)

Bram De Rock

Katholieke Universiteit Leuven Campus Kortrijk (KULAK)

Frederic Vermeulen

KU Leuven

Date Written: July 24, 2017

Abstract

We show that transferable utility has no nonparametrically testable implications for marriage stability in settings with a single consumption observation per household and heterogeneous individual preferences across households. This completes the results of Cherchye, Demuynck, De Rock, and Vermeulen (2017), who characterized Pareto efficient household consumption under the assumption of marriage stability without transferable utility. First, we show that the nonparametric testable conditions established by these authors are not only necessary but also sufficient for rationalizability by a stable marriage matching. Next, we demonstrate that exactly the same testable implications hold with and without transferable utility between household members. We build on this last result to provide a primal and dual linear programming characterization of a stable matching allocation for the observational setting at hand. This provides an explicit specification of the marital surplus function rationalizing the observed matching behavior.

Keywords: marriage stability, household consumption, nonparametric testable implications, transferable utility

JEL Classification: C14, D11, C78

Suggested Citation

Cherchye, Laurens and Demuynck, Thomas and De Rock, Bram and Vermeulen, Frederic, Stable Marriage with and Without Transferable Utility: Nonparametric Testable Implications (July 24, 2017). Available at SSRN: https://ssrn.com/abstract=3052218 or http://dx.doi.org/10.2139/ssrn.3052218

Laurens Cherchye (Contact Author)

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant
Belgium

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Thomas Demuynck

Catholic University of Leuven (KUL) - Faculty of Business and Economics (FBE) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Bram De Rock

Katholieke Universiteit Leuven Campus Kortrijk (KULAK) ( email )

Etienne Sabbelaan 53
Kortrijk, B-8500
Belgium

Frederic Vermeulen

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
34
Abstract Views
476
PlumX Metrics