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Matching Model

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7 views18 pages

Matching Model

Uploaded by

TWICE FUA GROUP
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Matching Model

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Course Outline
Microeconomics

Firms and
How Markets
Introduction Organization of
Work Additional
industries
Topics

What is Demand and Cost of


Economics? supply Production
Matching Model

Gains from Perfect


Elasticity
Trade Competition

Efficiency and
Equity Monopoly

Government
Policies in Oligopoly
Markets

International
Trade

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Matching Model

 Importance:
 College admission
 Marriage
 Families—houses
 Hospitals—doctors

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2012 Nobel Prize in Economics

 Lloyd Shapley and Alvin Roth


 https://www.nobelprize.org/prizes/economic-
sciences/2012/shapley/prize-presentation/

 The Deferred Acceptance Algorithm


discovered by Gale and Shapley is the corner
stone on which matching theory and
applications rest.

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5
Marriage market

 Monogamous: one to one match


 Heterosexual
 A matching is an one to one pairing of each
man to a woman.
 Call a matching stable if no pair of one man
and one woman can object the proposed
assignment.

 Stability is important!
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Marriage market

 Find a stable matching for the following


preferences:
M1 M2 M3 M4 W1 W2 W3 W4
---------------------------------||--------------------------------
W4 W4 W3 W4 || M2 * M1 M1
* W3 W1 W1 || M1 * M2 *
* * * * || M4 * * *
* * * * || M3 * * *
* Stands for celibacy.

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Stable matching

 Sometimes there are more than one stable


matching for a set of preferences.
M1 M2 M3 W1 W2 W3
-------------------------------------------------
W2 W1 W1 M1 M3 M1
W1 W3 W2 M3 M1 M3
W3 W2 W3 M2 M2 M2

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Stable matching

 Check that the following two matchings are


stable.
 Matching 1: (M1, W2; M2,W3; M3,W1)
 Matching 2: (M1,W1; M2,W3; M3,W2)
 Check everyone’s preference over matching
1 and matching 2.
 We call matching 1 M-optimal, matching 2 W-
optimal.

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Gale and Shapley theorem (1962)

 In any marriage market with strict preferences.


 (a). There is at least one stable matching.
 (b). There is a stable matching, called the M-optimal
matching where every man gets the best of all his
stable mates and every woman gets her worst stable
mates. There is a stable matching called W-optimal
matching, where every woman gets the best of all her
stable mates. There is a unique stable matching if and
only if M-optimal and W-optimal matching coincide.

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Gale and Shapley theorem (1962)

 (c) The M-optimal matching is computed by


means of the Gale-Shapley algorithm where men
propose.
 (d) A statement symmetrical to (c) holds for W-
optimal matching.

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Gale-Shapley algorithm

 Gale-Shapley algorithm where men propose


 Step 1: Each man proposes to his first choice woman.
If a woman receives exactly one proposal, this man is
called her engagee. If a woman receives more than
one proposal, she keeps the proposer she likes best
as her engagee and rejects the others. Men are now
partitioned into engaged or rejected. The algorithm
stops if all men are engaged or stay single as they
preferred, otherwise we go to the next step.

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Gale-Shapley algorithm

 Step 2: All rejected men propose now to their


second best choice. Each woman receiving new
proposals keeps as her engagee the man she
likes best among current proposer(s) and possibly
former engagee and rejects the others. (Thus a
man previously engaged may now be rejected.)
The algorithm stops if all men are engaged or stay
single as they preferred. Otherwise we go to the
next step.

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Gale-Shapley algorithm

 Step 3: All rejected men propose now to their next


choice, and women update their engagements
according to new proposal(s) if any. The algorithm
stops if all men are engaged or stay single as
they preferred. Otherwise repeat step 3.
end of the algorithm

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examples

 Find M-optimal and W-optimal matching for


the following preferences.
M1 M2 M3 W1 W2 W3
------------------------------------------------
W2 W2 W3 M1 M3 M2
W1 W1 W1 M3 M1 M3
W3 W3 W2 M2 M2 M1

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Applications

 U.S. National Resident Matching Program


started in the 1950s with programs/hospitals
proposing algorithm and switched to
applicant proposing in 1997.
 Matching students with public high schools in
New York City—2003 reform

 JUPAS

17
Topic Intended Learning Outcome

12.1 Find M-optimal and W-optimal stable


matchings in marriage market and understand
gender discrimination in M-proposing societies.

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