Matching With Pre-Existing Binding Agreements: The Agreeable Core

Abstract

Matching market models ignore prior commitments. Yet many job seekers, for example, are already employed, and the same holds for many other matching markets. I analyze two-sided matching markets with pre-existing binding agreements between market participants. In this model, a pair of participants bound to each other by a pre-existing agreement must agree to any action they take. To analyze their behavior, I propose a new solution concept, the agreeable core, consisting of the matches which cannot be renegotiated without violating the binding agreements. My main contribution is an algorithm that constructs such a match by a novel combination of the Deferred Acceptance and Top Trading Cycles algorithms. The algorithm is robust to various manipulations and has applications to numerous markets including the resident-to-hospital match, college admissions, school choice, and labor markets.