Dynamic Matching Markets and the Deferred Acceptance Mechanism

John Kennes, Daniel Monde and Norovsambuu Tumennasan ()
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Daniel Monde: Department of Economics and Business Economics, Aarhus University, Denmark and Sao Paulo School of Economics, Brazil

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: In many dynamic matching markets, priorities depend on previous allocations. In such environments, agents on the proposing side can manipulate the period-by-period deferred acceptance (DA) mechanism. We show that the fraction of agents with incentives to manipulate the DA mechanism approaches zero as the market size increases. In addition, we provide a novel al- gorithm to calculate the percentage of markets that can be manipulated. Based on randomly generated data, we find that the DA becomes approximately non-manipulable when the schools capacity reaches 20. Our theoretical and simulation results together justify the implementation of the period-by-period DA mechanism in dynamic markets.

Keywords: Large market; dynamic school choice; deferred acceptance mechanism (search for similar items in EconPapers)
JEL-codes: C78 D61 D78 I20 (search for similar items in EconPapers)
Pages: 45
Date: 2015-12-15
New Economics Papers: this item is included in nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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