Stochastic Stability for Roommate Markets

• Authors: Flip Klijn.
• BSE Working Paper: 110828 | September 15
• Keywords: core , stochastic stability , (pairwise) stability , roommate markets
• JEL codes: C62, C71, C78
• core
• stochastic stability
• (pairwise) stability
• roommate markets

We show that for any roommate market the set of stochastically stable matchings coincides with the set of absorbing matchings. This implies that whenever the core is non-empty (e.g., for marriage markets), a matching is in the core if and only if it is stochastically stable, i.e., stochastic stability is a characteristic of the core. Several solution concepts have been proposed to extend the core to all roommate markets (including those with an empty core). An important implication of our results is that the set of absorbing matchings is the only solution concept that is core consistent and shares the stochastic stability characteristic with the core.