SSRN Author: Alfred GalichonAlfred Galichon SSRN Content
http://www.ssrn.com/author=483323
http://www.ssrn.com/rss/en-usTue, 05 Jan 2016 01:50:26 GMTeditor@ssrn.com (Editor)Tue, 05 Jan 2016 01:50:26 GMTwebmaster@ssrn.com (WebMaster)SSRN RSS Generator 1.0REVISION: Costly Concessions: An Empirical Framework for Matching with Imperfectly Transferable UtilityWe introduce an empirical framework for models of matching with imperfectly transferable utility and unobserved heterogeneity in tastes. Our framework allows us to characterize matching equilibrium in a flexible way that includes as special cases the classic fully- and non-transferable utility models, collective models, and settings with taxes on transfers, deadweight losses, and risk aversion. We allow for the introduction of a very general class of unobserved heterogeneity on agents' preferences. Under minimal assumptions, we show existence and uniqueness of equilibrium. We provide two algorithms to compute the equilibria in our model. The first algorithm operates under any structure of heterogeneity in preferences. The second algorithm is more efficient, but applies only in the case when random utilities are logit. We show that the log-likelihood of the model has a particularly simple expression and we compute its derivatives. As an application, we build a model of marriage with ...
http://www.ssrn.com/abstract=2535394
http://www.ssrn.com/1457316.htmlMon, 04 Jan 2016 15:55:52 GMTNew: Duality in Dynamic Discrete Choice ModelsUsing results from convex analysis, we investigate a novel approach to identification and estimation of discrete choice models which we call the “Mass Transport Approach” (MTA). We show that the conditional choice probabilities and the choicespecific payoffs in these models are related in the sense of conjugate duality, and that the identification problem is a mass transport problem. Based on this, we propose a new two-step estimator for these models; interestingly, the first step of our estimator involves solving a linear program which is identical to the classic assignment (two-sided matching) game of Shapley and Shubik (1971). The application of convex-analytic tools to dynamic discrete choice models, and the connection with two-sided matching models, is new in the literature.
http://www.ssrn.com/abstract=2700773
http://www.ssrn.com/1451465.htmlWed, 09 Dec 2015 12:42:13 GMTNew: Optimal Transport Methods in EconomicsThis is a preliminary draft of the manuscript of my textbook "Optimal Transport Methods in Economics" (to appear), based on lectures given at MIT in Spring 2015. The present preprint version is circulated to invite comments by readers.
http://www.ssrn.com/abstract=2699381
http://www.ssrn.com/1451299.htmlWed, 09 Dec 2015 07:26:19 GMTREVISION: Like Attract Like? A Structural Comparison of Homogamy Across Same-Sex and Different-Sex HouseholdsIn this paper, we extend Gary Becker's empirical analysis of the marriage market to same-sex couples. Beckers's theory rationalizes the well-known phenomenon of homogamy among heterosexual couples: individuals mate with their likes because many characteristics, such as education, consumption behaviour, desire to nurture children, religion, etc., exhibit strong complementarities in the household production function. However, because of asymmetries in the distributions of male and female characteristics, men and women may need to marry "up" or "down" according to the relative shortage of their characteristics among the populations of men and women. Yet, among homosexual couples, this limit does not exist as partners are drawn from the same population, and thus the theory of assortative mating would boldly predict that individuals will choose a partner with nearly identical characteristics. Empirical evidence suggests a very different picture: a robust stylized fact is that the ...
http://www.ssrn.com/abstract=2530724
http://www.ssrn.com/1439103.htmlSun, 25 Oct 2015 02:44:57 GMTREVISION: Matching in Closed-Form: Equilibrium, Identification, and Comparative StaticsThis paper provides closed-form formulas for a multidimensional two-sided matching problem with transferable utility and heterogeneity in tastes. When the matching surplus is quadratic, the marginal distributions of the characteristics are normal, and when the heterogeneity in tastes is of the continuous logit type, as in Choo and Siow (2006), we show that the optimal matching distribution is also jointly normal and can be computed in closed form from the model primitives. Conversely, the quadratic surplus function can be identiﬁed from the optimal matching distribution, also in closed-form. The analytical formulas make it computationally easy to solve problems with even a very large number of matches and allow for quantitative predictions about the evolution of the solution as the technology and the characteristics of the matching populations change.
http://www.ssrn.com/abstract=2510732
http://www.ssrn.com/1438448.htmlThu, 22 Oct 2015 05:59:58 GMTNew: Entropy Methods for Identifying Hedonic ModelsThis paper contributes to the literature on hedonic models in two ways. First, it makes use of Queyranne's reformulation of a hedonic model in the discrete case as a network flow problem in order to provide a proof of existence and integrality of a hedonic equilibrium and efficient computational techniques of hedonic prices. Second, elaborating on entropic methods developed in Galichon and Salanié (2014), this paper proposes a new identification strategy for hedonic models in a single market. This methodology allows one to introduce heterogeneities in both consumers' and producers' attributes and to recover producers' profits and consumers' utilities based on the observation of production and consumption patterns and the set of hedonic prices.
http://www.ssrn.com/abstract=2614999
http://www.ssrn.com/1402871.htmlMon, 08 Jun 2015 18:47:22 GMTNew: Canonical Correlation and Assortative Matching: A RemarkIn the context of the Beckerian theory of marriage, where men and women match on a single-dimensional index that is the weighted sum of their respective multivariate attributes, many papers in the literature have used linear canonical correlation, and related techniques, in order to estimate these weights. We argue that this estimation technique is inconsistent and suggest some solutions.
http://www.ssrn.com/abstract=2614919
http://www.ssrn.com/1402870.htmlMon, 08 Jun 2015 18:42:07 GMTREVISION: Cupid’s Invisible Hand: Social Surplus and Identification in Matching ModelsWe investigate a model of one-to-one matching with transferable utility when some of the characteristics of the players are unobservable to the analyst. We allow for a wide class of distributions of unobserved heterogeneity, subject only to a separability assumption that generalizes Choo and Siow (2006). We first show that the stable matching maximizes a social gain function that trades off exploiting complementarities in observable characteristic sand matching on unobserved characteristics. We use this result to derive simple closed-form formulae that identify the joint surplus in every possible match and the equilibrium utilities of all participants, given any known distribution of unobserved heterogeneity. If transfers are observed, then the pre-transfer utilities of both partners are also identified. We discuss computational issues and provide an algorithm that is extremely efficient in important instances. Finally, we present two estimators of the joint surplus and we revisit ...
http://www.ssrn.com/abstract=1804623
http://www.ssrn.com/1377518.htmlMon, 02 Mar 2015 05:56:46 GMTREVISION: Single Market Nonparametric Identification of Multi-Attribute Hedonic Equilibrium ModelsThis paper derives conditions under which preferences and technology are nonparametrically identified in hedonic equilibrium models, where products are differentiated along more than one dimension and agents are characterized by several dimensions of unobserved heterogeneity. With products differentiated along a quality index and agents characterized by scalar unobserved heterogeneity, single crossing conditions on preferences and technology provide identifying restrictions. We develop similar shape restrictions in the multi-attribute case and we provide identification results from the observation of a single market. We thereby extend identification results in Matzkin (2003) and Heckman, Matzkin, and Nesheim (2010) to accommodate multiple dimensions of unobserved heterogeneity.
http://www.ssrn.com/abstract=2392549
http://www.ssrn.com/1368706.htmlTue, 27 Jan 2015 13:18:16 GMTREVISION: Local Utility and Multivariate Risk AversionWe revisit Machina's local utility as a tool to analyze attitudes to multivariate risks. Using martingale embedding techniques, we show that for non-expected utility maximizers choosing between multivariate prospects, aversion to multivariate mean preserving increases in risk is equivalent to the concavity of the local utility functions, thereby generalizing Machina's result in Machina (1982). To analyze comparative risk attitudes within the multivariate extension of rank dependent expected utility of Galichon and Henry (2011), we extend Quiggin's monotone mean and utility preserving increases in risk and show that the useful characterization given in Landsberger and Meilijson (1994) still holds in the multivariate case.
http://www.ssrn.com/abstract=1982293
http://www.ssrn.com/1365789.htmlSat, 17 Jan 2015 07:09:57 GMTREVISION: Single Market Nonparametric Identification Multi-Attribute Hedonic Equilibrium ModelsThis paper derives conditions under which preferences and technology are nonparametrically identified in hedonic equilibrium models, where products are differentiated along more than one dimension and agents are characterized by several dimensions of unobserved heterogeneity. With products differentiated along a quality index and agents characterized by scalar unobserved heterogeneity, single crossing conditions on preferences and technology provide identifying restrictions. We develop similar shape restrictions in the multi-attribute case and we provide identification results from the observation of a single market. We thereby extend identification results in Matzkin (2003) and Heckman, Matzkin, and Nesheim (2010) to accommodate multiple dimensions of unobserved heterogeneity.
http://www.ssrn.com/abstract=2392549
http://www.ssrn.com/1365788.htmlSat, 17 Jan 2015 07:08:18 GMT