TY - UNPB

T1 - Cost of transformation

T2 - a measure on matchings

AU - Can, Burak

AU - Pourpouneh, Mohsen

AU - Storcken, Ton

PY - 2020

Y1 - 2020

N2 - This paper constructs a normative framework to quantify the difference (distance) between outcomes of market mechanisms in matching markets. We investigate the "cost of transformation" from one market mechanism to another, based on the differences in the outputs of these mechanisms, i.e., the matchings. Several conditions are introduced to ensure that this cost reflects the welfare effect of the transformation on individuals. We find a class of measures called scaled Borda measures, which is characterized by these conditions. Several possible applications of these measures in different markets are also discussed, such as measuring how unstable, how unfair, or how inefficient a mechanism (or a matching) is.

AB - This paper constructs a normative framework to quantify the difference (distance) between outcomes of market mechanisms in matching markets. We investigate the "cost of transformation" from one market mechanism to another, based on the differences in the outputs of these mechanisms, i.e., the matchings. Several conditions are introduced to ensure that this cost reflects the welfare effect of the transformation on individuals. We find a class of measures called scaled Borda measures, which is characterized by these conditions. Several possible applications of these measures in different markets are also discussed, such as measuring how unstable, how unfair, or how inefficient a mechanism (or a matching) is.

M3 - Working paper

T3 - IFRO Working Paper

BT - Cost of transformation

PB - Department of Food and Resource Economics, University of Copenhagen

ER -