Ae. Roth et E. Peranson, The redesign of the matching market for American physicians: Some engineering aspects of economic design, AM ECON REV, 89(4), 1999, pp. 748-780
We report on the design of the new clearinghouse adopted by the National Re
sident Matching Program, which annually fills approximately 20,000 jobs for
new physicians. Because the market has complementarities between applicant
s and between positions, the theory of simple matching markets does not app
ly directly. However computational experiments show the theory provides goa
d approximations. Furthermore, the set of stable matchings, and the opportu
nities for strategic manipulation, are surprisingly small. A new kind of "c
ore convergence" result explains this; that each applicant interviews only
a small fraction of available positions is important. We also describe engi
neering aspects of the design process. (JEL C78, B41, J44).