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Random path to stability in a decentralized market with contracts

Author

Listed:
  • Beatriz Millán

    (Universidad Nacional de San Luis and CONICET
    Universidad Nacional de San Juan)

  • Eliana Pepa Risma

    (Universidad Nacional de San Luis and CONICET)

Abstract

For a many-to-many matching model with contracts in which the preferences of all hospitals satisfy substitutability and the preferences of all doctors satisfy substitutability, the law of aggregate demand and q-congruence, we show the existence of a convergent blocking path. In other words, we start from an arbitrary allocation and build a finite sequence of allocations leading to a stable outcome, with the special feature that each allocation can be obtained from the previous one by satisfying a unilateral or a bilateral blocking contract. As a consequence, we prove that the process of allowing randomly selected blocks to be satisfied eventually leads to a stable outcome. This explains the fact that some markets with contracts reach stable assignments by means of decentralized decisions.

Suggested Citation

  • Beatriz Millán & Eliana Pepa Risma, 2018. "Random path to stability in a decentralized market with contracts," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 51(1), pages 79-103, June.
    • Handle: RePEc:spr:sochwe:v:51:y:2018:i:1:d:10.1007_s00355-018-1108-6
    DOI: 10.1007/s00355-018-1108-6
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    References listed on IDEAS

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    Cited by:

    1. Ágnes Cseh & Martin Skutella, 2019. "Paths to stable allocations," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(3), pages 835-862, September.

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