Matching Riron to Market Design (Matching Theory and Market Design)

In recent years, economic theory has played an increasingly significant role in the design of social systems. This textbook covers for this field, known as market design. It focuses on matching theory, the core of the field, and is written to be accessible even for beginners, guiding readers from foundational concepts to the frontiers of the latest research.
 
Matching theory grapples with the fundamental societal question of “who gets what.” This is a practical and “useful” theory with a wide range of real-world applications. Its principles are applied to real-world problems, such as university and high school admissions, job markets, internal corporate human resources, and the complex process of pairing organ donors with recipients. A version of this theory is also used at the University of Tokyo for its department selection process. On such occasions, achieving an optimal match requires looking beyond simple monetary prices and carefully considering the preferences of all participants and the fairness of the system.
 
The book extends from basic models to a wide range of applied examples while intuitively explaining the foundational concepts of matching theory. It is based on lectures that I, one of the authors, have delivered at universities in Japan and abroad. The text is written to preserve a dynamic, “live-lecture” feel, making the content accessible and engaging even for those who are not specialists in economics. However, this accessibility does not come at the expense of rigor. The book does not shy away from using the mathematical formulas necessary for precise proofs while ensuring that they are not overly complex for readers.
 
A key feature of this book is its focus on how the theory has been applied to drive real-world institutional reforms. It highlights several case studies in which the authors were directly involved, either in the research or in the design of the systems. For instance, it covers the design of the matching system for Japanese medical school graduates choosing their residency programs. It also examines the use of market design to coordinate nursery school admissions and resolve waitlist problems. Through these practical examples from our own experience, we hope to demonstrate the powerful and constructive role economic theory can play in the design of social systems.
 
I am confident this book will be a rewarding read for a wide audience. This includes students preparing to study economics, policymakers concerned with institutional design, and readers interested in bridging between theory and real-world applications. I believe it is a book that will leave you feeling it was “well worth studying.” We warmly invite you to pick up a copy and explore this fascinating field.
 

(Written by KOJIMA Fuhito, Professor, Graduate School of Economics / 2025)