Title

Payoff Equivalence of Efficient Mechanisms in Large Matching Markets

Document Type

Discussion Paper

Publication Date

7-1-2015

CFDP Number

2015

CFDP Pages

29

Abstract

We study Pareto efficient mechanisms in matching markets when the number of agents is large and individual preferences are randomly drawn from a class of distributions, allowing for both common and idiosyncratic shocks. We show that, as the market grows large, all Pareto efficient mechanisms — including top trading cycles, serial dictatorship, and their randomized variants — are uniformly asymptotically payoff equivalent “up to the renaming of agents,” yielding the utilitarian upper bound in the limit. This result implies that, when the conditions of our model are met, policy makers need not discriminate among Pareto efficient mechanisms based on the aggregate payoff distribution of participants.

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