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Application fee manipulations in matching markets

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  • Afacan, Mustafa Oǧuz

Abstract

In some well-known hospital–intern type of matching markets, hospitals impose mandatory application fees on internship applicants to consider their applications. Motivated by this real-life phenomenon, we study the application fee overreporting incentives of hospitals in centralized matching markets by assuming that interns have finite budgets to spend on such fees. Our main theorem shows that no stable mechanism is immune to application fee manipulations. Interestingly, under any stable rule, hospitals might not only obtain better matchings but also increase their application fee revenues through overreporting their application fees. In the restricted domains in which either side has homogeneous preferences or each hospital has only one available position, every stable mechanism turns out to be immune to application fee overreportings.

Suggested Citation

  • Afacan, Mustafa Oǧuz, 2013. "Application fee manipulations in matching markets," Journal of Mathematical Economics, Elsevier, vol. 49(6), pages 446-453.
    • Handle: RePEc:eee:mateco:v:49:y:2013:i:6:p:446-453
    DOI: 10.1016/j.jmateco.2013.08.006
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    Cited by:

    1. Abizada, Azar, 2016. "Stability and incentives for college admissions with budget constraints," Theoretical Economics, Econometric Society, vol. 11(2), May.
    2. Mustafa Afacan, 2014. "Fictitious students creation incentives in school choice problems," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(3), pages 493-514, August.
    3. Afacan, Mustafa Og̃uz & Dur, Umut Mert, 2017. "When preference misreporting is Harm[less]ful?," Journal of Mathematical Economics, Elsevier, vol. 72(C), pages 16-24.
    4. Afacan, Mustafa Oǧuz, 2016. "Enrollment manipulations in school choice," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 119-125.
    5. Fisher, James C.D., 2020. "Existence of stable allocations in matching markets with infinite contracts: A topological approach," Journal of Mathematical Economics, Elsevier, vol. 91(C), pages 136-140.
    6. Assaf Romm, 2014. "Implications of capacity reduction and entry in many-to-one stable matching," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(4), pages 851-875, December.
    7. Azar Abizada, 2017. "Paths to stability for college admissions with budget constraints," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(3), pages 879-890, August.
    8. Afacan, Mustafa Oǧuz, 2020. "Graduate admission with financial support," Journal of Mathematical Economics, Elsevier, vol. 87(C), pages 114-127.

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