Computing Equilibrium in Matching Markets

TL;DR

This paper presents a polynomial time algorithm for computing market clearing prices in matching markets with fixed agent preferences, even when utilities are non-separable, extending previous work on Fisher markets.

Contribution

It introduces a novel polynomial time algorithm for matching markets with fixed agent preferences, overcoming non-separability of utilities.

Findings

Polynomial time algorithm for fixed agent preferences

Algorithm works despite non-separable utilities

Simpler algorithm for fixed number of items

Abstract

Market equilibria of matching markets offer an intuitive and fair solution for matching problems without money with agents who have preferences over the items. Such a matching market can be viewed as a variation of Fisher market, albeit with rather peculiar preferences of agents. These preferences can be described by piece-wise linear concave (PLC) functions, which however, are not separable (due to each agent only asking for one item), are not monotone, and do not satisfy the gross substitute property-- increase in price of an item can result in increased demand for the item. Devanur and Kannan in FOCS 08 showed that market clearing prices can be found in polynomial time in markets with fixed number of items and general PLC preferences. They also consider Fischer markets with fixed number of agents (instead of fixed number of items), and give a polynomial time algorithm for this case if preferences are separable functions of the items, in addition to being PLC functions. Our main result is a polynomial time algorithm for finding market clearing prices in matching markets with fixed number of different agent preferences, despite that the utility corresponding to matching markets is not separable. We also give a simpler algorithm for the case of matching markets with fixed number of different items.