Stability and efficiency in decentralized two-sided markets with weak preferences / by Radoslav S. Raykov.: FB3-5/2017-4E-PDF
"Many decentralized markets are able to attain a stable outcome despite the absence of acentral authority. A stable matching, however, need not be efficient if preferences are weak. This raises the question whether a decentralized market with weak preferences can attain Pareto efficiency in the absence of a central matchmaker. I show that when agent tastes are independent, the random stable match in a large-enough market is asymptotically Pareto efficient even with weak preferences. In fact, even moderate-sized markets can attain good efficiency levels. The average fraction of agents who can Pareto improve is below 10% in a market of size n = 79 when one side of the market has weak preferences; when both sides have weak preferences, the inefficiency falls below 10% for n > 158. This implies that approximate Pareto efficiency is attainable in a decentralized market even in the absence of a central matchmaker"--Abstract, p. ii.
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| Department/Agency | Bank of Canada. |
|---|---|
| Title | Stability and efficiency in decentralized two-sided markets with weak preferences / by Radoslav S. Raykov. |
| Series title | Bank of Canada staff working paper, 1701-9397 ; 2017-4 |
| Publication type | Series - View Master Record |
| Language | [English] |
| Format | Electronic |
| Electronic document | |
| Note(s) | "February 2017." Includes bibliographical references. Includes abstract in French. |
| Publishing information | [Ottawa] : Bank of Canada, 2017. |
| Author / Contributor | Raykov, Radoslav S. |
| Description | ii, 36 p. |
| Catalogue number |
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| Subject terms | Markets Modelling |
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