Not quite the best response: truth-telling, strategy-proof matching, and the manipulation of others

Pablo Guillen and Rustamdjan Hakimov

Experimental Economics, 2017, vol. 20, issue 3, No 7, 670-686

Abstract: Abstract Following the advice of economists, school choice programs around the world have lately been adopting strategy-proof mechanisms. However, experimental evidence presents a high variation of truth-telling rates for strategy-proof mechanisms. We crash test the connection between the strategy-proofness of the mechanism and truth-telling. We employ a within-subjects design by making subjects take two simultaneous decisions: one with no strategic uncertainty and one with some uncertainty and partial information about the strategies of other players. We find that providing information about the out-of-equilibrium strategies played by others has a negative and significant effect on truth-telling rates. That is, most participants in our within-subjects design try and fail to best-respond to changes in the environment. We also find that more sophisticated subjects are more likely to play the dominant strategy (truth-telling) across all the treatments. These results have potentially important implications for the design of markets based on strategy-proof matching mechanisms.

Keywords: School choice; Top trading cycles; Strategy-proofness; Experiments; Matching (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (26)

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DOI: 10.1007/s10683-016-9505-0

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