As we all know, matching is the part of economics that focuses on the question of who gets what when the goods (heterogeneous and indivisible) in the economy are going to be allocated.
How well the process of matching works defines how well the markets work or if they are efficient or not.
One-sided matching models have been gaining popularity among economists because of the numerous applications.
The model that caught my eye was the Cadet-branch matching.
Until 2005, the United States Military Academy matched cadets to military specialties or branches using a single category ranking system to determine priority. Since 2006, priority for the last 25 percent of the places at each specialty has been given to people that sign a branch of choice “contract” committing to serve for 3 additional years. Although 3 mores years of serving seems to be a lot, people wanting to enlist are reacting well to the “new” system.
The 2006 model provided the Army with more stability and the welfare of the cadets increased because a lot of them are doing what they believe they are good for.
Also, in words of the author, matching with contracts is a good way to solve real life issues and that’s why it’s gaining a lot of popularity nowadays.
I encourage all of you to read this short paper written by Tayfun Sönmez of the Boston College:
I will also leave this video in which Sönmez explains his take on the model: