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Optimal Dynamic Matching

Author

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  • Yariv, Leeat
  • Baccara, Mariagiovanna
  • Lee, SangMok

Abstract

We study a dynamic matching environment where individuals arrive sequentially. There is a tradeoff between waiting for a thicker market, allowing for higher quality matches, and minimizing agents' waiting costs. The optimal mechanism cumulates a stock of incongruent pairs up to a threshold and matches all others in an assortative fashion instantaneously. In discretionary settings, a similar protocol ensues in equilibrium, but expected queues are inefficiently long. We quantify the welfare gain from centralization, which can be substantial, even for low waiting costs. We also evaluate welfare improvements generated by transfer schemes, and alternative priority protocols.

Suggested Citation

  • Yariv, Leeat & Baccara, Mariagiovanna & Lee, SangMok, 2018. "Optimal Dynamic Matching," CEPR Discussion Papers 12986, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:12986
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    4. Mariagiovanna Baccara & Allan Collard-Wexler & Leonardo Felli & Leeat Yariv, 2014. "Child-Adoption Matching: Preferences for Gender and Race," American Economic Journal: Applied Economics, American Economic Association, vol. 6(3), pages 133-158, July.
    5. Mark Satterthwaite & Artyom Shneyerov, 2007. "Dynamic Matching, Two-Sided Incomplete Information, and Participation Costs: Existence and Convergence to Perfect Competition," Econometrica, Econometric Society, vol. 75(1), pages 155-200, January.
    6. Gunter J. Hitsch & Ali Hortaçsu & Dan Ariely, 2010. "Matching and Sorting in Online Dating," American Economic Review, American Economic Association, vol. 100(1), pages 130-163, March.
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    Cited by:

    1. Marco LiCalzi, 2022. "Bipartite choices," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 45(2), pages 551-568, December.
    2. Battal Doğan & M. Bumin Yenmez, 2023. "When does an additional stage improve welfare in centralized assignment?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(4), pages 1145-1173, November.
    3. Baccara, Mariagiovanna & Lee, SangMok & Yariv, Leeat, 2023. "Task allocation and on-the-job training," Journal of Economic Theory, Elsevier, vol. 207(C).
    4. Schummer, James, 2021. "Influencing waiting lists," Journal of Economic Theory, Elsevier, vol. 195(C).
    5. Jerry Anunrojwong & Krishnamurthy Iyer & Vahideh Manshadi, 2023. "Information Design for Congested Social Services: Optimal Need-Based Persuasion," Management Science, INFORMS, vol. 69(7), pages 3778-3796, July.
    6. Itai Ashlagi & Alvin E. Roth, 2021. "Kidney Exchange: An Operations Perspective," Management Science, INFORMS, vol. 67(9), pages 5455-5478, September.
    7. Niclas Boehmer & Markus Brill & Ulrike Schmidt-Kraepelin, 2021. "Selecting Matchings via Multiwinner Voting: How Structure Defeats a Large Candidate Space," Papers 2102.07441, arXiv.org.
    8. Baccara, Mariagiovanna & Lee, SangMok & Yariv, Leeat, 2020. "Optimal dynamic matching," Theoretical Economics, Econometric Society, vol. 15(3), July.
    9. Ramesh Johari & Vijay Kamble & Yash Kanoria, 2021. "Matching While Learning," Operations Research, INFORMS, vol. 69(2), pages 655-681, March.
    10. Jose H. Blanchet & Martin I. Reiman & Viragh Shah & Lawrence M. Wein & Linjia Wu, 2020. "Asymptotically Optimal Control of a Centralized Dynamic Matching Market with General Utilities," Papers 2002.03205, arXiv.org, revised Jun 2021.
    11. Ce Liu, 2020. "Stability in Repeated Matching Markets," Papers 2007.03794, arXiv.org, revised Mar 2021.
    12. Mertikopoulos, Panayotis & Nax, Heinrich H. & Pradelski, Bary S.R., 2024. "Quick or cheap? Breaking points in dynamic markets," Journal of Mathematical Economics, Elsevier, vol. 112(C).
    13. Combe, Julien & Nora, Vladyslav & Tercieux, Olivier, 0. "Dynamic assignment without money: optimality of spot mechanisms," Theoretical Economics, Econometric Society.
    14. Irene Lo & Vahideh Manshadi & Scott Rodilitz & Ali Shameli, 2020. "Commitment on Volunteer Crowdsourcing Platforms: Implications for Growth and Engagement," Papers 2005.10731, arXiv.org, revised Jul 2021.
    15. Lei, Xiaochang, 2023. "Optimal queue to minimize waste," Mathematical Social Sciences, Elsevier, vol. 123(C), pages 87-94.
    16. Nick Arnosti & Peng Shi, 2020. "Design of Lotteries and Wait-Lists for Affordable Housing Allocation," Management Science, INFORMS, vol. 66(6), pages 2291-2307, June.
    17. Mohammad Akbarpour & Yeganeh Alimohammadi & Shengwu Li & Amin Saberi, 2021. "The Value of Excess Supply in Spatial Matching Markets," Papers 2104.03219, arXiv.org.
    18. Doval, Laura, 2022. "Dynamically stable matching," Theoretical Economics, Econometric Society, vol. 17(2), May.
    19. Vincent Iehlé, 2016. "Gradual College Admisssion," Post-Print halshs-02367006, HAL.
    20. Maxey, Tyler, 2023. "Dynamic matching with transfers," Economics Letters, Elsevier, vol. 233(C).

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    More about this item

    Keywords

    Dynamic matching; Mechanism design; Organ donation; Market design;
    All these keywords.

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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