Theoretical analysis uncovers a connectivity threshold in two-sided matching markets, highlighting network design strategies that balance agent welfare against unmatched rates.
Key Points
Stable matchings shift across a connectivity threshold at average degree d, separating a weak competition regime from strong competition that favors the short side.
Random graph modeling and numerical simulations characterize large market equilibria, confirming that competitive advantages emerge when connectivity expands past the threshold.
Counterfactual analyses of urban school admissions validate this diagnostic principle, demonstrating that optimal network design balances participant welfare against unmatched rates.