Matching markets have an important role in the economy. They determine such varied outcomes as which student goes to which college, who gets what job, and who buys what house. Recent work on the theory of matching markets has been useful to the design of markets as well as for the repair of market failures. Much of this work, however, has focused on the design and analysis of centralized matching markets. Many matching markets are not fully centralized; for example, college admissions decisions in the United States are made by each individual institution on its own. Furthermore, almost all of the centralized matching marekts are preceeded by decentralized opportunities for participants to match. This award funds research on the game theory of these decentralized markets as well as lab experiments and a field study to identify the crucial elements that determine decentralized market outcomes.
The field study uses the newly developed theory to analyze a unique data set tracing the way a specific adoption agency matched adopting parents to domestic birth mothers. The goal is to use these data to better understand the preferences of adoptive parents and birth mothers towards potential matches.
Broader Impacts: The theory and experiments will provide useful tools for improving the design of matching markets. The field study gives crucial information for child advocates who are seeking to improve state-level policy towards adoption and foster care.
