34504 - Topics in Microeconomics

Learning outcomes

The purpose of the course is to give a background in matching theory with some applications. Starting with the seminal work of Gale and Shapley (1962), matching theory has been an important tool in designing a number of market and quasi-market allocation systems, like National Resident Matching Program (that places American doctors to their rst jobs), school choice systems operating in New York and Boston, New England Program for Kidney Exchange to name a few. The course will cover many-to-one matching and selected applications from the TOPICS that include college admissions, school choice, housing market, kidney exchange, labor markets with contracts and matching with bargaining.

Course contents

This is an evolving course outline. Starred items are required readings.

1)     Many-to-One Matching

a)     *[RS] Ch. 5

b)    Sonmez, T., (1997), \Manipulation via Capacities in Two-Sided Matching Markets," Journal of Economic Theory, 77:197-204.

c)     Konishi, H. and U. Unver 2006. \Games of Capacity Manipulation in Hospital-Intern Market," Social Choice and Welfare, 27: 3-24.

d)    *Mumcu, A. and I. Saglam, 2009. \Games of Capacity Allocation in Many-to-One Matching with an Aftermarket" Social Choice and Welfare 33(3), pp. 383-403.

TOPICS

1)     Interdependent Preferences

a)     *Mumcu, A. and I. Saglam, 2010. \Stable One-to-One Matchings with Externalities" Mathematical Social Sciences, 60(2), 154-159.

b)    Mumcu, A. and I. Saglam, 2008. \Rationalizability of One-to-One Matchings with Externalities," Economics Bulletin, 4(32), pp 1-8.

c)     Mumcu, A., Saglam, I., 2007. The Core of a Housing Market with Externalities. Economics Bulletin 3(55); 1-5.

d)    Klaus, B. and Klijn, F., 2005. Stable Matchings and Preferences of Couples. Journal of Economic Theory 121, 75-106.

e)     Echenique, F., Yenmez, B., 2007. A Solution to Matching with Preferences over Colleagues. Games and Economic Behavior 59, 46-71.

f)     Dutta, B., Masso, J., 1997. Stability of Matchings When Individuals Have Preferences over Colleagues Journal of Economic Theory 75, 464-475.

g)    Hafalir, I.E., 2008f. Stability of Marriage with Externalities. International Journal of Game Theory, forthcoming.

h)     Sasaki, H., Toda, M., 1996. Two-Sided Matching Problems with Externalities. Journal of Economic Theory 70, 93-108.

2)     School Choice

a)     *Abdulkadiroglu, Atila, and Tayfun Sonmez, 2003 \School Choice: A Mechanism Design Approach", American Economic Review, 93-3: 729-747.

b)    Abdulkadiroglu, Atila , Parag A. Pathak, and Alvin E. Roth, 2005 "The New York City High School Match," American Economic Review, Papers and Proceedings, 95: 364-367.

c)     Abdulkadiroglu, Atila, Parag A. Pathak, Alvin E. Roth, and Tayfun Sonmez, 2006 "Changing the Boston School Choice Mechanism,"

d)    Balinski, M. and T. Sonmez 1999. \A Tale of Two Mechanisms: Student Placement," Journal of Economic Theory, 84: 73-94.

e)     Ergin, H. 2002. \E_cient Resource Allocation Based on Priorities," Econometrica, 68: 1403-1433.

f)     *Erdil, A. and H. Ergin \What's the matter with tie-breaking? (Improving e_ciency in school choice)", forthcoming American Economic Review

3)     House Allocation

a)     Shapley, L. and H. Scarf, 1974. \On Cores and Indivisibilities," Journal of Mathematical Economics, 1: 23-28.

b)    *Abdulkadiroglu, A. and T. Sonmez, 1999. \House Allocation with Existing Tennants," Journal of Economic Theory, 88:233-260.

c)     *Abdulkadiroglu, A. and T. Sonmez, 1998. \Random Serial Dictatorship and the Core from Random Endowments in House Allocation Problems," Econometrica, 66: 689-701.

d)    Yilmaz, O. 2005. \House Allocation with Existing Tenants: A New Solution,"

4)     Kidney Exchange

a)     Roth, Alvin E., Tayfun Sonmez, and M. Utku Unver, 2004. \Kidney Exchange," Quarterly Journal of Economics, 119(2): 457-488.

b)    *Roth, Alvin E., Tayfun Sonmez , and M. Utku Unver, 2005. \Pairwise Kidney Exchange," Journal of Economic Theory, 125(2): 151-188.

c)     Roth, Alvin E., Tayfun Sonmez , and M. Utku Unver, 2005. \A Kidney Exchange Clearinghouse in New England" American Economic Review, Papers and Proceedings, 95(2): 376-380.

d)    Roth, Alvin E., Tayfun Sonmez , and M. Utku Unver, 2007. \E_cient Kidney Exchange: Coincidence of Wants in Markets with Compatibility-Based Preferences," American Economic Review, 97(3): 828- 851.

5)     Generalized Matching Theory

a)     *Kelso, Alexander S.,Jr. and Vincent P. Crawford 1982. "Job Matching, Coalition Formation, and Gross Substitutes", Econometrica, 50: 1483-1504.

b)    *Hat_eld, John William and Milgrom, Paul R. 2005. \Matching with Contracts," American Economic Review, 95(4):. 913-935

c)     Ostrovsky, Michael, \Stability in Supply Chain Networks," American Economics Review, forthcoming

d)      Mumcu, A. and I. Saglam, 2008. \Marriage Formation/Dissolution and Marital Distribution in a Two- Period Economic Model of Matching with Cooperative Bargaining" Journal of Arti_cial Societies and Social Simulations 11(4) 3.

Readings/Bibliography

Roth, A.E., and Sotomayor, M.A.Two-Sided Matching: A Study in Game Theoretic Modeling and Analysis, Cambridge University Press, Cambridge, 1990.

Office hours

See the website of Ayse Mumcu