Incentive Compatibility of Large Centralized Matching Markets

SangMok Lee

The Review of Economic Studies, 2017, vol. 84, issue 1, 444-463

Abstract: We study the manipulability of stable matching mechanisms. To quantify incentives to manipulate stable mechanisms, we consider markets with random cardinal utilities, which induce ordinal preferences over match partners. We show that most agents in large matching markets are close to being indifferent of overall stable matchings. In one-to-one matching, the utility gain by manipulating a stable mechanism does not exceed the gap between utilities from the best and worst stable partners. Thus, most agents in a large market would not have significant incentives to manipulate stable mechanisms. The incentive compatibility extends to many-to-one matching when agents employ truncation strategies and capacity manipulations in a Gale—Shapley mechanism.

Keywords: Two-sided matching; Stable matching mechanism; Large market; Random bipartite graph (search for similar items in EconPapers)
JEL-codes: C78 D61 D78 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:84:y:2017:i:1:p:444-463.

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