Chapter | The New Palgrave Dictionary of Economics | 2008

Matching and Market Design

by Muriel Niederle, Alvin E. Roth and Tayfun Sonmez

Abstract

Matching is the part of economics concerned with who transacts with whom and how. Models of matching, starting with the Gale-Shapley deferred acceptance algorithm, have been particularly useful in studying labour markets and in helping design clearinghouses to fix market failures. Studying how markets fail also gives us insight into how market places work well. They need to provide a thick, uncongested market in which it is safe to participate. Clearinghouses that do this have been designed for many entry-level professional labor markets, for the assignment of children to public schools, and for exchange of live-donor kidneys for transplantation if available.

Keywords: Market Design; Marketplace Matching; Outcome or Result; Mathematical Methods;

Citation:

Niederle, Muriel, Alvin E. Roth, and Tayfun Sonmez. "Matching and Market Design." In The New Palgrave Dictionary of Economics. 2nd ed. Edited by Steven Derlauf and Larry Blume. Hampshire, U.K.: Palgrave Macmillan, 2008.