Stability vs., Pareto Efficiency in the marriage market (i.e., a one-to-one matching market with strict preferences)....

Stability vs., Pareto Efficiency in the marriage market (i.e., a one-to-one matching market with strict preferences).

(a) Show that stable matchings are Pareto efficient. That is, for any stable matching µ between a group of men M and a group of women W, there is no matching µ 0 such that µ 0 (a) µ(a) for all agents, and the preference is strict for at least one agent.

(b) Is any Pareto efficient matching stable? Prove or give a counter-example.

Expert Solution

Rahul Sunny answered 2 years ago

What is a Pareto efficiency of allocations resulting from barter or market exchange?

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