A Unified Approach to Strategic Network Formation and Classical Matching Theory

20 Pages Posted: 5 Jun 2023 Last revised: 10 Jul 2023

See all articles by Evan Sadler

Evan Sadler

Columbia University, Graduate School of Arts and Sciences, Department of Economics

Date Written: May 18, 2023

Abstract

Despite addressing similar underlying questions, the literatures on network formation and matching have evolved more or less independently. This paper offers a common framework, studying a general model of network formation without externalities---equivalently, a one-sided many-to-many matching model. I give conditions for the existence and uniqueness of stable graphs, I prove a rural hospital theorem, and I highlight a link-by-link conflict of interest across different stable graphs. Special cases contain and extend classic results for the roommate problem and two-sided matching markets. An iterated deletion algorithm adapted from Gutin et al. (2022) furnishes a crucial tool, reducing network formation games to a normal form with helpful properties.

Keywords: Network formation, matching, iterated deletion

JEL Classification: D85

Suggested Citation

Sadler, Evan, A Unified Approach to Strategic Network Formation and Classical Matching Theory (May 18, 2023). Available at SSRN: https://ssrn.com/abstract=4453801 or http://dx.doi.org/10.2139/ssrn.4453801

Evan Sadler (Contact Author)

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
123
Abstract Views
335
Rank
390,869
PlumX Metrics