Stable and extremely unequal

Alfred Galichon; Octavia Ghelfi; Marc Henry

doi:10.1016/j.econlet.2023.111101

Stable and extremely unequal

Alfred Galichon, Octavia Ghelfi, Marc Henry

Economics

Research output: Contribution to journal › Article › peer-review

2 Scopus citations

Abstract

We show how stability as a solution concept in matching often comes at the cost of extreme forms on inequality. Restricting our attention to aligned preferences, we show that the stable matching results from the lexicographic welfare maximization of the pairs’ welfare, starting with the best-off. We compare this solution with an alternative allocation, that although unstable, maximizes the welfare lexicographically starting with the worst-off pairs.

Original language	English (US)
Article number	111101
Journal	Economics Letters
Volume	226
DOIs	https://doi.org/10.1016/j.econlet.2023.111101
State	Published - May 2023

All Science Journal Classification (ASJC) codes

Finance
Economics and Econometrics

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10.1016/j.econlet.2023.111101

Cite this

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title = "Stable and extremely unequal",

abstract = "We show how stability as a solution concept in matching often comes at the cost of extreme forms on inequality. Restricting our attention to aligned preferences, we show that the stable matching results from the lexicographic welfare maximization of the pairs{\textquoteright} welfare, starting with the best-off. We compare this solution with an alternative allocation, that although unstable, maximizes the welfare lexicographically starting with the worst-off pairs.",

author = "Alfred Galichon and Octavia Ghelfi and Marc Henry",

note = "Publisher Copyright: {\textcopyright} 2023 Elsevier B.V.",

year = "2023",

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language = "English (US)",

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AU - Ghelfi, Octavia

AU - Henry, Marc

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N2 - We show how stability as a solution concept in matching often comes at the cost of extreme forms on inequality. Restricting our attention to aligned preferences, we show that the stable matching results from the lexicographic welfare maximization of the pairs’ welfare, starting with the best-off. We compare this solution with an alternative allocation, that although unstable, maximizes the welfare lexicographically starting with the worst-off pairs.

AB - We show how stability as a solution concept in matching often comes at the cost of extreme forms on inequality. Restricting our attention to aligned preferences, we show that the stable matching results from the lexicographic welfare maximization of the pairs’ welfare, starting with the best-off. We compare this solution with an alternative allocation, that although unstable, maximizes the welfare lexicographically starting with the worst-off pairs.

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DO - 10.1016/j.econlet.2023.111101

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VL - 226

JO - Economics Letters

JF - Economics Letters

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Stable and extremely unequal

Abstract

All Science Journal Classification (ASJC) codes

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