Two-sided Matching Theory And Its Application To This Year's College Graduate Labor Market In China

Economics is a subject that studying human behavior and limited resource's allocation. Market is the base of the resource allocation. There are usually buyers, sellers and transaction objects in the market. The two-sided participants's combination will be different when the market mechanism changed. What's kind of market mechanism is stable and efficient? Based on the study of this question, we initiate the research of the Two-sided matching theory.Two-sided matching theory is a branch of game theory. Gale and Shapley began the earliest study of it in 1962. They designed the deferred acceptance algorithm and got the conclusion that there existed non-empty stable matching in the marriage model. By using the college admission model, they also proved that every applicant could achieve optimal stabe match through the "deferred acceptance algorithm". This article is the pioneer of the two-sided matching theory's study. Then the two-sided matching theory had great development. According to amount of the objects of the matching, the matching theory could be divided into: one to one matching, one to many matching and many to many matching. The two-sided matching theory describes the matching situation of the market, explains the foundation of the stability of the market and provides us a right choice to design a rational matching mechanism. It has already been successfully applied to the makrets such as: higher education market, graduates labor market, school choice market and kidney trading market abroad.China's this year's college graduates labor market is an important market. Each year about six million new graduates will enter the market. With 1999's extending of the college enrollment, the number of graduates in China becomes larger and larger, while the employment rate continues to descend. Many college graduates spend plenty of time and energy to find a job. On one hand, it is difficult for college graduates to be employed, on the other hand the breach of contract rates are raising. All of these give much trouble to both of the graduates and the corporations. So it will be of great practical value to study this market using the two-sided matching theory.This article firstly reviews the development of the two-sided matching theory and study the application of two-sided matching theory in the overseas labor market. Then introduce the characteristic of this year's college graduates labor market in China, build the random non-centrailzed one-off recruitment algorithm, prove the instability of the market and the related conclusion and then explain the phenomenon of the market by using the two-sided matching theory. Finally, this article introduces a better algorithm called preference sequence non-centrailzed one-off recruitment algorithm, improves the matching mechanism, discusses the results when loosening the hypothesis and gives several suggestions of the improvement of the market.