Limit your applications : dealing with congested markets in the matching procedure
Title: Limit your applications : dealing with congested markets in the matching procedure
Publisher: Inderscience Enterprises Ltd
Citation: International journal of computational economics and econometrics, 2016, Vol. 6, No. 4, pp. 413-431
ISSN: 1757-1170; 1757-1189
We study congested matching markets, such as the PhD academic job market, and consider alternative mechanisms that could be implemented by a social planner. Building on the Gale and Shapley algorithm, we analyse (i) a procedure accounting for a limit in the number of applications PhD graduates can submit (PhD-LIMIT), and (ii) a procedure accounting for a limit in the number of applications universities can evaluate (UNI-LIMIT). We find that the PhD-LIMIT procedure improves the matching outcome and is preferable to a UNI-LIMIT procedure. The optimal limit in the number of applications balances the trade-off between being unmatched and gaining a better match in the aggregate, and the benefit can be considerable if the graduates' preferences over the positions are not very correlated. Overall, we suggest a direction to improve the matching market for PhD candidates by improving the outcome of their matches and lowering the hiring costs for universities.
Subject: Matching markets; Truncation; Gale-Shapley deferred acceptance algorithm
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