Compromises and Rewards: Stable and Non-manipulable Probabilistic Matching

Jens Gudmundsson

No 2015:32, Working Papers from Lund University, Department of Economics

Abstract: Can we reconcile stability with non-manipulability in two-sided matching problems by selecting lotteries over matchings? We parameterize, through sets of utility functions, how ordinal preferences induce preferences over lotteries and develop corresponding notions of ex-ante stability and non-manipulability. For most sets, the properties are incompatible. However, for the set of utility functions with increasing differences, stability and non-manipulability characterize Compromises and Rewards. This novel rule is fundamentally different from the one that has attracted most attention in the literature, Deferred Acceptance. We then derive complementary negative results that show that increasing differences essentially is a necessary condition for the properties to be compatible.

Keywords: Pairing; Lottery; Stability; Non-manipulability; Compromises; Rewards (search for similar items in EconPapers)
JEL-codes: C62 C78 D02 D60 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2015-10-26, Revised 2017-10-19
New Economics Papers: this item is included in nep-gth and nep-upt
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Compromises and Rewards: stable and non-manipulable probabilistic matching (2019)
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