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Large roommate problem with non-transferable random utility

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  • Pęski, Marcin

Abstract

We analyze a large roommate problem (i.e., marriage matching in which the marriage is not restricted solely to matchings between men and women) with non-transferable utility. It is well known that while a roommate problem may not have a stable proper matching, each roommate problem does have an stable improper matching. In a random utility model with types from Dagsvik (2000) and Menzel (2015), we show that all improper stable matchings are asymptotically close to being a proper stable matching. Moreover, the distribution of types in stable matchings (proper or not) converges to the unique maximizer of an expression that is a sum of two terms: the average “welfare” of the matching and the Shannon entropy of the distribution. In the noiseless limit, when the random component of the utility is reduced to zero, the distribution of types of matched pairs converges to the outcome of the transferable utility model.

Suggested Citation

  • Pęski, Marcin, 2017. "Large roommate problem with non-transferable random utility," Journal of Economic Theory, Elsevier, vol. 168(C), pages 432-471.
    • Handle: RePEc:eee:jetheo:v:168:y:2017:i:c:p:432-471
    DOI: 10.1016/j.jet.2016.12.012
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    References listed on IDEAS

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    1. Alfred Galichon & Bernard Salanié, 2022. "Cupid’s Invisible Hand: Social Surplus and Identification in Matching Models," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(5), pages 2600-2629.
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    5. Dagsvik, John K, 2000. "Aggregation in Matching Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 27-57, February.
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    More about this item

    Keywords

    Matching; Random utility; Large market;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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