Advanced Microeconomic Theory I, part I

Marcin Pęski

Contact

Instructor: Marcin Pęski, mpeski@gmail.com,
Office hours: Wed, 2-4pm, GE207,
Lecture: Wed:, 9-11pm

Lectures and readings

This lecture has two parts. The first part is taught by me and the second part is taught by Colin Stewart.
The goal of my part of the lecture is to provide an introduction to main topics of the modern matching and network theory. We are going to look at both cxooperative approach to matching (a.k.a. stability) and non-cooperative (dynamic search). In networks, we will look at models of network formation (cooperative, stochastic, and strategic) as well as some selected models of games on networks.
Below, you can find a tentative description of the topics that we are going to cover as well as the reading list. The list will be updated as we move along, so check it often. I will post (and update) lecture notes (most likely slides) as soon as I can.
Date Main topics and lecture notes Smaller topics Readings Extras
13.01 Classic matching theory. Marriage matching with strict preferences. Structure of stable matchings. Uniqueness and existence of stable solution. lecture notes*, [18], [39]
13-20.01 Other matching models Matching with transferrable and partially transferrable utility.
lecture notes*, [7], [39], [41],
[19], [33]
,
Marriage matching with weak preferences (school allocation problem). [1], [3], [16]*, [2],
Matching with married workers [25], [34]
Roommate problem. [12], [35]
Kidney exchange. [24], [38],
27.01 Many-to-one matching models Many-to-one matchings (and matchings with married couples) [25], [20]*, [10]
27.01-3.02 Large matching models with random utility, Large matching (Dagsvik model) Distributions over observable characteristics.
[14] , [32], [35]*, [13],
[19], [28]
Dynamic matching models, lecture notes*, [40], [5]
Presentation: Barter Dynamic centralized matching
10.02 Object allocation models [8][30]*, [11],
Large matching models. Uniqueness and strategy-proofness. [22],[27], [37], [29]
Network formation [23]
Presentations: Network origins of fluctuations, Strategic interactions,Key player, Position on networks. [6]*, [4]*, [15],
17.02 Bargaining Trade and bargaining. [17], [31],
Job search Job search. [9] *

Grading

The grade in the entire class (both parts) will be an weighted average of a grade from a two half-hour presentations (30% each), and a class participation (40%). The will be one presentation for my segment and one presentation for Colin’s segment. My presentation will take part in the last class (or earlier if you choose). Sign up sheet for the presentations: https://docs.google.com/spreadsheets/d/1qhZxvdtJHIoG_ut3vVtJgTEIpMy_3K1Peg3-bC4OcJg/edit?usp=sharing. Under the list, you can find a list of papers. If you want to talk about any other recent paper on networks or matching - but let me know in advance.
For the class participation, I would like you to (a) attend the class, (b) read the lecture notes BEFORE the class and be able to demonstrate the fact that you read it, in some way. For instance, asking a thoughtful questions about the material is a good way of demonstrating the reading. Clearly saying which parts of the lecture notes are not clear is another.

References

[1] Atila Abdulkadiroglu, Parag A. Pathak, Alvin E. Roth, Tayfun Sönmez: “The Boston Public School Match”, American Economic Review, pp. 368—371, 2005. URL http://www.aeaweb.org/articles.php?doi=10.1257/000282805774669637.

[2] Atila Abdulkadiroglu, Parag A. Pathak, Alvin E. Roth: “Strategy-Proofness versus Efficiency in Matching with Indifferences: Redesigning the NYC High School Match”, American Economic Review, pp. 1954—78, 2009. URL http://www.aeaweb.org/articles.php?doi=10.1257/aer.99.5.1954.

[3] Atila Abdulkadiroglu, Parag A. Pathak, Alvin E. Roth: “The New York City High School Match”, American Economic Review, pp. 364—367, 2005. URL http://www.aeaweb.org/articles.php?doi=10.1257/000282805774670167.

[4] Daron Acemoglu, Vasco M. Carvalho, Asuman Ozdaglar, Alireza Tahbaz-Salehi: “The Network Origins of Aggregate Fluctuations”, Econometrica, pp. 1977—2016, 2012. URL http://onlinelibrary.wiley.com/doi/10.3982/ECTA9623/abstract.

[5] Alp E. Atakan: “Assortative Matching with Explicit Search Costs”, Econometrica, pp. 667—680, 2006.

[6] Coralio Ballester, Antoni Calvó-Armengol, Yves Zenou: “Who's Who in Networks. Wanted: The Key Player”, Econometrica, pp. 1403—1417, 2006. URL http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0262.2006.00709.x/abstract.

[7] Becker: “A Theory of Marriage, Part I”, Journal of Polictical Economy, pp. 813—846, 1973. URL http://links.jstor.org/sici?sici=0022-3808.

[8] Anna Bogomolnaia, Herve Moulin: “A New Solution to the Random Assignment Problem”, Journal of Economic Theory, pp. 295—328, 2001.

[9] Antoni Calvó-Armengol, Matthew O. Jackson: “The Effects of Social Networks on Employment and Inequality”, The American Economic Review, pp. 426—454, 2004. URL http://www.jstor.org/stable/3592937.

[10] Yeon-Koo Che, Jinwoo Kim, Fuhito Kojima: “Stable Matching in Large Economies”, , 2015.

[11] Yeon-Koo Che, Fuhito Kojima: “Asymptotic Equivalence of Probabilistic Serial and Random Priority Mechanisms”, Econometrica, pp. 1625—1672, 2010.

[12] Pierre-Andre Chiappori, Alfred Galichon, Bernard Salanie: “The Roommate Problem - Is More Stable Than You Think”, Games and Economic Behavior, 2014.

[13] Eugene Choo, Aloysius Siow: “Who Marries Whom and Why”, Journal of Political Economy, pp. 175—201, 2006.

[14] John K. Dagsvik: “Aggregation in Matching Markets”, International Economic Review, pp. 27—58, 2000.

[15] Matthew Elliott, Benjamin Golub, Matthew O. Jackson: “Financial Networks and Contagion”, American Economic Review, pp. 3115—53, 2014. URL http://www.aeaweb.org/articles.php?doi=10.1257/aer.104.10.3115.

[16] Aytek Erdil, Haluk Ergin: “What's the Matter with Tie-Breaking? Improving Efficiency in School Choice”, American Economic Review, pp. 669—89, 2008. URL http://www.aeaweb.org/articles.php?doi=10.1257/aer.98.3.669.

[17] Douglas M. Gale, Shachar Kariv: “Financial Networks”, American Economic Review, pp. 99—103, 2007. URL http://www.aeaweb.org/articles.php?doi=10.1257/aer.97.2.99.

[18] Douglas Gale, Lloyd Shapley: “College Admissions and the Stability of Marriage”, American Mathematical Monthly, pp. 9—15, 1962.

[19] Alfred Galichon, Bernard Salanie: Cupid's Invisible Hand: Social Surplus and Identification in Matching Models, 2012. URL http://papers.ssrn.com/abstract=1804623.

[20] John William Hatfield, Paul R. Milgrom: “Matching with Contracts”, American Economic Review, pp. 913—935, 2005.

[21] Nicole Immorlica, Mohammad Mahdian: “Marriage, honesty, and stability”, IN PROCEEDINGS OF THE SIXTEENTH ANNUAL ACM-SIAM SYMPOSIUM ON DISCRETE ALGORITHMS (SODA, pp. 53—-62, 2005. URL http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.84.2411.

[22] Nicole Immorlica, Mohammad Mahdian: “Marriage, honesty, and stability”, IN PROCEEDINGS OF THE SIXTEENTH ANNUAL ACM-SIAM SYMPOSIUM ON DISCRETE ALGORITHMS (SODA, pp. 53—-62, 2005. URL http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.84.2411.

[23] Matthew O. Jackson: Social and Economic Networks. Princeton University Press, 2010.

[24] Judd B. Kessler, Alvin E. Roth: “Getting More Organs for Transplantation”, American Economic Review, pp. 425—30, 2014. URL http://www.aeaweb.org/articles.php?doi=10.1257/aer.104.5.425.

[25] Fuhito Kojima, Parag A. Pathak, Alvin E. Roth: “Matching with Couples: Stability and Incentives in Large Markets”, The Quarterly Journal of Economics, pp. qjt019, 2013.

[26] Fuhito Kojima, Parag A Pathak: “Incentives and Stability in Large Two-Sided Matching Markets”, American Economic Review, pp. 608—627, 2009. URL http://dspace.mit.edu/handle/1721.1/61663.

[27] Fuhito Kojima, Parag A Pathak: “Incentives and Stability in Large Two-Sided Matching Markets”, American Economic Review, pp. 608—627, 2009. URL http://dspace.mit.edu/handle/1721.1/61663.

[28] SangMok Lee, Leeat Yariv: On the Efficiency of Stable Matchings in Large Markets, 2014. URL http://papers.ssrn.com/abstract=2464401.

[29] Sangmok Lee: “Incentive Compatibility of Large Centralized Matching Markets”, , 2012.

[30] Qingmin Liu, Marek Pycia: Ordinal Efficiency, Fairness, and Incentives in Large Markets ∗. 2012.

[31] Mihai Manea: “Bargaining in Stationary Networks”, American Economic Review, pp. 2042—80, 2011. URL http://www.aeaweb.org/articles.php?doi=10.1257/aer.101.5.2042.

[32] Konrad Menzel: “Large Matching Markets as Two-Sided Demand Systems”, accepted at Econometrica, 2014. URL http://homepages.nyu.edu/~km125/large_matching.pdf.

[33] Ismael Mourifie, Aloysius Siow: Cohabitation versus Marriage: Marriage Matching with Peer Effects, 2014. URL http://papers.ssrn.com/abstract=2541895.

[34] Thanh Nguyen, Rakesh Vohra: Near Feasible Stable Matchings with Complementarities. 2014. URL http://web.ics.purdue.edu/~nguye161/.

[35] Marcin Peski: Large Roommate Problem with Non-Transferrable Random Utility, 2015. URL http://individual.utoronto.ca/mpeski/papers/roommate.pdf.

[36] Boris Pittel: “The Average Number of Stable Matchings”, SIAM Journal on Discrete Mathematics, pp. 530, 1989. URL http://link.aip.org/link/SJDMEC/v2/i4/p530/s1&Agg=doi.

[37] Boris Pittel: “The Average Number of Stable Matchings”, SIAM Journal on Discrete Mathematics, pp. 530, 1989. URL http://link.aip.org/link/SJDMEC/v2/i4/p530/s1&Agg=doi.

[38] Alvin E. Roth, Tayfun Sonmez, M. Utku Unver: “Efficient Kidney Exchange: Coincidence of Wants in Markets with Compatibility-Based Preferences”, American Economic Review, pp. 828—851, 2007. URL http://www.aeaweb.org/articles.php?doi=10.1257/aer.97.3.828.

[39] Alvin E. Roth, Marilda A. Oliveira Sotomayor: Two-Sided Matching: A Study in Game-Theoretic Modeling and Analysis. Cambridge University Press, 1992.

[40] Robert Shimer, Lones Smith: “Assortative Matching and Search”, Econometrica, pp. 343—369, 2000.

[41] Cedric Villani: Topics in Optimal Transportation. American Mathematical Society, 2003.