Publications
Publications
- 2008
- HBS Working Paper Series
Unravelling in Two-Sided Matching Markets and Similarity of Preferences
By: Hanna Halaburda
Abstract
This paper investigates the causes and welfare consequences of unravelling in two-sided matching markets. It shows that similarity of preferences is an important factor driving unravelling. In particular, it shows that under the ex-post stable mechanism (the mechanism that the literature focuses on), unravelling is more likely to occur when participants have more similar preferences. It also shows that any Pareto-optimal mechanism must prevent unravelling, and that the ex-post stable mechanism is Pareto-optimal if and only if it prevents unravelling.
Keywords
Citation
Halaburda, Hanna. "Unravelling in Two-Sided Matching Markets and Similarity of Preferences." Harvard Business School Working Paper, No. 09-068, November 2008.