The revealed preference theory of stable and extremal stable matchings

Federico Echenique; Sangmok Lee; Matthew Shum; M. Bumin Yenmez

doi:10.3982/ECTA10011

The revealed preference theory of stable and extremal stable matchings

Federico Echenique
, Sangmok Lee
, Matthew Shum
, M. Bumin Yenmez

Research output: Contribution to journal › Article › peer-review

43 Scopus citations

Abstract

We investigate the testable implications of the theory of stable matchings. We provide a characterization of the matchings that are rationalizable as stable matchings when agents' preferences are unobserved. The characterization is a simple nonparametric test for stability, in the tradition of revealed preference tests.We also characterize the observed stable matchings when monetary transfers are allowed and the stable matchings that are best for one side of the market: extremal stable matchings. We find that the theory of extremal stable matchings is observationally equivalent to requiring that there be a unique stable matching or that the matching be consistent with unrestricted monetary transfers.

Original language	English
Pages (from-to)	153-171
Number of pages	19
Journal	Econometrica
Volume	81
Issue number	1
DOIs	https://doi.org/10.3982/ECTA10011
State	Published - 2013

Keywords

Assignment game
Extremal stability
Revealed preference theory
Stability
Two-sided matching markets

Access to Document

10.3982/ECTA10011

Cite this

@article{a936cbacf9d141faaab0af9241300362,

title = "The revealed preference theory of stable and extremal stable matchings",

abstract = "We investigate the testable implications of the theory of stable matchings. We provide a characterization of the matchings that are rationalizable as stable matchings when agents' preferences are unobserved. The characterization is a simple nonparametric test for stability, in the tradition of revealed preference tests.We also characterize the observed stable matchings when monetary transfers are allowed and the stable matchings that are best for one side of the market: extremal stable matchings. We find that the theory of extremal stable matchings is observationally equivalent to requiring that there be a unique stable matching or that the matching be consistent with unrestricted monetary transfers.",

keywords = "Assignment game, Extremal stability, Revealed preference theory, Stability, Two-sided matching markets",

author = "Federico Echenique and Sangmok Lee and Matthew Shum and Yenmez, \{M. Bumin\}",

note = "Publisher Copyright: {\textcopyright} 2013 The Econometric Society.",

year = "2013",

doi = "10.3982/ECTA10011",

language = "English",

volume = "81",

pages = "153--171",

journal = "Econometrica",

issn = "0012-9682",

number = "1",

}

TY - JOUR

T1 - The revealed preference theory of stable and extremal stable matchings

AU - Echenique, Federico

AU - Lee, Sangmok

AU - Shum, Matthew

AU - Yenmez, M. Bumin

PY - 2013

Y1 - 2013

N2 - We investigate the testable implications of the theory of stable matchings. We provide a characterization of the matchings that are rationalizable as stable matchings when agents' preferences are unobserved. The characterization is a simple nonparametric test for stability, in the tradition of revealed preference tests.We also characterize the observed stable matchings when monetary transfers are allowed and the stable matchings that are best for one side of the market: extremal stable matchings. We find that the theory of extremal stable matchings is observationally equivalent to requiring that there be a unique stable matching or that the matching be consistent with unrestricted monetary transfers.

AB - We investigate the testable implications of the theory of stable matchings. We provide a characterization of the matchings that are rationalizable as stable matchings when agents' preferences are unobserved. The characterization is a simple nonparametric test for stability, in the tradition of revealed preference tests.We also characterize the observed stable matchings when monetary transfers are allowed and the stable matchings that are best for one side of the market: extremal stable matchings. We find that the theory of extremal stable matchings is observationally equivalent to requiring that there be a unique stable matching or that the matching be consistent with unrestricted monetary transfers.

KW - Assignment game

KW - Extremal stability

KW - Revealed preference theory

KW - Stability

KW - Two-sided matching markets

UR - https://www.scopus.com/pages/publications/84879746695

U2 - 10.3982/ECTA10011

DO - 10.3982/ECTA10011

M3 - Article

AN - SCOPUS:84879746695

SN - 0012-9682

VL - 81

SP - 153

EP - 171

JO - Econometrica

JF - Econometrica

IS - 1

ER -

The revealed preference theory of stable and extremal stable matchings

Abstract

Keywords

Access to Document

Other files and links

Fingerprint

Cite this