Truncation strategies in two-sided matching markets: Theory and experiment

Marco Castillo () and Ahrash Dianat

Games and Economic Behavior, 2016, vol. 98, issue C, 180-196

Abstract: We investigate strategic behavior in a centralized matching clearinghouse based on the Gale–Shapley deferred acceptance algorithm. To do so, we conduct a laboratory experiment to test the degree to which agents strategically misrepresent their preferences by submitting a “truncation” of their true preferences. Our experimental design uses a restricted environment in which a particular form of truncation is always a best response. We find that subjects do not truncate their preferences more often when truncation is profitable. They do, however, truncate their preferences less often when truncation is dangerous – that is, when there is a risk of “over-truncating” and remaining unmatched. Our findings suggest that behavioral insights can play an important role in the field of market design.

Keywords: Two-sided matching; Truncation strategies; Experiments (search for similar items in EconPapers)
JEL-codes: C78 C92 D47 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:98:y:2016:i:c:p:180-196

DOI: 10.1016/j.geb.2016.06.006

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