Experience Transmission: Truth-telling Adoption in Matching

Min Zhu ()
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Min Zhu: Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon Saint-Etienne, Ecully, F-69130, France; Université Lyon 2, Lyon, F-69007, France

No 1518, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: Boundedly rational people may engage in strategic behavior under the Deferred Acceptance mechanism, resulting in unstable outcome and reducing overall welfare. How to reduce strategic behavior is thus of importance for field implementation. I address this issue in a laboratory experiment by looking at whether experienced people can transmit what they have learned and promote truth-telling behavior. In this experiment, subjects repeatedly play the matching game induced by the Deferred Acceptance mechanism for a finite number of periods, and then offer advice about best strategies to their successors. Participants in succeeding sessions are either given advice from their predecessors or observe histories of previous sessions. I find that advice given by predecessors can help subjects coordinate on truth-telling behavior and the Pareto efficient stable outcome (but this effect is not statistically significant in correlated preference environment). On the contrary, observing histories has ambiguous effect on truth-telling adoption. This implies that policy makers can encourage real people to adopt truth-telling in the field by providing them with collections of good advice from people who have already participated in matching market.

Keywords: deferred acceptance mechanism; matching; experiment; experience transmission (search for similar items in EconPapers)
JEL-codes: C78 C92 D47 D82 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (9)

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