Quantitative Economics: Jul, 2016, Volume 7, Issue 2

Clearinghouses for two‐sided matching: An experimental study

Federico Echenique, Alistair J. Wilson, Leeat Yariv

We experimentally study the Gale and Shapley, 1962 mechanism, which is utilized in a wide set of applications, most prominently the National Resident Matching Program (NRMP). Several insights come out of our analysis. First, only 48% of our observed outcomes are stable, and among those a large majority culminate at the receiver‐optimal stable matching. Second, receivers rarely truncate their true preferences: it is the proposers who do not make offers in order of their preference, frequently skipping potential partners. Third, market characteristics affect behavior: both the cardinal representation and core size influence whether laboratory outcomes are stable. We conclude by using our controlled results and a behavioral model to shed light on a number of stylized facts we derive from new NRMP survey and outcome data, and to explain the small cores previously documented for the NRMP.

Deferred acceptance stability experiments centralized matching C78 C90 D47

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