Stable Matchings with Choice Correspondences Under Acyclicity
Varun Bansal, Mihir Bhattacharya, Ojasvi Khare
Abstract
We study the existence of stable matchings when agents have choice correspondences instead of preference relations. We extend the framework of Chambers and Yenmez (2017) by weakening the Path Independence assumption. For many-to-many markets, we show that stable matchings exist when choice correspondences satisfy Substitutability and a new General Acyclicity condition. We provide a constructive proof using a Grow or Discard Algorithm that iteratively expands or eliminates contracts until a strongly maximal Individually Rational set is reached. We provide an algorithm to obtain stable matchings in which rejected contracts are not permanently discarded, distinguishing our approach significantly from standard DAA-type algorithms. For one-to-one markets, we introduce a replacement-based notion of stability and provide an algorithm that constructs stable matchings when choice correspondences satisfy Binary Acyclicity, a property weaker than Path Independence. JEL classification: C62, C78, D01, D47 Keywords: choice correspondences, substitutability, general acyclicity, many-to-many matching, matching with contracts, Grow or Discard algorithm, replacement stability, binary acyclicity.