An Experimental Study of Decentralized Matching

TL;DR

This study experimentally investigates decentralized two-sided matching markets without transfers, revealing that stable outcomes are common, median stable matchings prevail, and strategic behavior influences matching dynamics.

Contribution

It provides new empirical insights into decentralized matching markets, highlighting the prevalence of median stable matchings and strategic sophistication among participants.

Findings

Stable outcomes are prevalent in decentralized markets.

Median stable matchings are most common, unlike extremal matchings in centralized systems.

Participants exhibit strategic behavior, avoiding blocking cycles.

Abstract

We present an experimental study of decentralized two-sided matching markets with no transfers. Experimental participants are informed of everyone's preferences and can make arbitrary non-binding match offers that get finalized when a period of market inactivity has elapsed. Several insights emerge. First, stable outcomes are prevalent. Second, while centralized clearinghouses commonly aim at implementing extremal stable matchings, our decentralized markets most frequently culminate in the median stable matching. Third, preferences' cardinal representations impact the stable partners participants match with. Last, the dynamics underlying our results exhibit strategic sophistication, with agents successfully avoiding cycles of blocking pairs.