Business Intelligence

Experimental Results On The Roommate Problem

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Executive Summary

The authors use laboratory experiments to analyze decentralized decision-making in one-sided matching markets. They find that subjects tend to make decisions in line with theoretical models, as their offering and accepting decisions are only guided by the objective of improving upon the status quo. However, isolated individual mistakes, which do not disappear with experience or time, often make theoretically-stable matchings unstable in the laboratory. Markets with incomplete information are especially prone to this problem. They focus on decentralized roommates markets, i.e. on markets where agents seek and are matched with each other by successively forming blocking pairs.

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