IDEAS home Printed from https://ideas.repec.org/p/mtl/montde/2018-02.html
   My bibliography  Save this paper

Robust design in monotonic matching markets: A case for firm-proposing deferred-acceptance

Author

Listed:
  • EHLERS, Lars
  • MASSO, Jordi

Abstract

We study two-sided matching markets among workers and firms. Workers seek one position at a firm but firms may employ several workers. In many applications those markets are monotonic: leaving positions unfilled is costly as for instance, for hospitals this means not being able to provide full service to its patients. A huge literature has advocated the use of stable mechanisms for clearinghouses. The interests among workers and firms are polarized among stable mechanisms, most famously the firm-proposing DA and the worker-proposing DA. We show that for the firm-proposing DA ex-ante incentive compatibility and ex-post incentive compatibility are equivalent whereas this is not necessarily true for the worker-proposing DA. The firm-proposing DA turns out to be more robust than the worker-proposing DA under incomplete information when incentives of both sides of the market are important.

Suggested Citation

  • EHLERS, Lars & MASSO, Jordi, 2018. "Robust design in monotonic matching markets: A case for firm-proposing deferred-acceptance," Cahiers de recherche 2018-02, Universite de Montreal, Departement de sciences economiques.
    • Handle: RePEc:mtl:montde:2018-02
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/1866/19965
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Shin, Sungwhee & Suh, Sang-Chul, 1996. "A mechanism implementing the stable rule in marriage problems," Economics Letters, Elsevier, vol. 51(2), pages 185-189, May.
    2. Alcalde, Jose, 1996. "Implementation of Stable Solutions to Marriage Problems," Journal of Economic Theory, Elsevier, vol. 69(1), pages 240-254, April.
    3. d’ASPREMONT, C. & PELEG, B., 1986. "Ordinal Bayesian incentive compatible representations of committees," LIDAM Discussion Papers CORE 1986042, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Dirk Bergemann & Stephen Morris, 2012. "Robust Mechanism Design: An Introduction," World Scientific Book Chapters, in: Robust Mechanism Design The Role of Private Information and Higher Order Beliefs, chapter 1, pages 1-48, World Scientific Publishing Co. Pte. Ltd..
    5. Lars Ehlers, 2008. "Truncation Strategies in Matching Markets," Mathematics of Operations Research, INFORMS, vol. 33(2), pages 327-335, May.
    6. Dirk Bergemann & Stephen Morris, 2012. "Robust Mechanism Design," World Scientific Book Chapters, in: Robust Mechanism Design The Role of Private Information and Higher Order Beliefs, chapter 2, pages 49-96, World Scientific Publishing Co. Pte. Ltd..
    7. Chen, Yan & Sonmez, Tayfun, 2006. "School choice: an experimental study," Journal of Economic Theory, Elsevier, vol. 127(1), pages 202-231, March.
    8. Ehlers, Lars & Masso, Jordi, 2007. "Incomplete information and singleton cores in matching markets," Journal of Economic Theory, Elsevier, vol. 136(1), pages 587-600, September.
    9. Atila Abdulkadiroglu & Yeon-Koo Che & Yosuke Yasuda, 2011. "Resolving Conflicting Preferences in School Choice: The "Boston Mechanism" Reconsidered," American Economic Review, American Economic Association, vol. 101(1), pages 399-410, February.
    10. Roth, Alvin E, 1991. "A Natural Experiment in the Organization of Entry-Level Labor Markets: Regional Markets for New Physicians and Surgeons in the United Kingdom," American Economic Review, American Economic Association, vol. 81(3), pages 415-440, June.
    11. Ehlers, Lars & Massó, Jordi, 2015. "Matching markets under (in)complete information," Journal of Economic Theory, Elsevier, vol. 157(C), pages 295-314.
    12. Sonmez, Tayfun, 1997. "Games of Manipulation in Marriage Problems," Games and Economic Behavior, Elsevier, vol. 20(2), pages 169-176, August.
    13. Atila Abdulkadiroglu & Tayfun Sönmez, 2003. "School Choice: A Mechanism Design Approach," American Economic Review, American Economic Association, vol. 93(3), pages 729-747, June.
    14. Roth, Alvin E., 1984. "Misrepresentation and stability in the marriage problem," Journal of Economic Theory, Elsevier, vol. 34(2), pages 383-387, December.
    15. Alvin E. Roth, 2002. "The Economist as Engineer: Game Theory, Experimentation, and Computation as Tools for Design Economics," Econometrica, Econometric Society, vol. 70(4), pages 1341-1378, July.
    16. Dipjyoti Majumdar & Arunava Sen, 2004. "Ordinally Bayesian Incentive Compatible Voting Rules," Econometrica, Econometric Society, vol. 72(2), pages 523-540, March.
    17. Ma Jinpeng, 1995. "Stable Matchings and Rematching-Proof Equilibria in a Two-Sided Matching Market," Journal of Economic Theory, Elsevier, vol. 66(2), pages 352-369, August.
    18. Roth, Alvin E, 1984. "The Evolution of the Labor Market for Medical Interns and Residents: A Case Study in Game Theory," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 991-1016, December.
    19. Roth, Alvin E., 1985. "The college admissions problem is not equivalent to the marriage problem," Journal of Economic Theory, Elsevier, vol. 36(2), pages 277-288, August.
    20. Roth, Alvin E & Sotomayor, Marilda, 1989. "The College Admissions Problem Revisited," Econometrica, Econometric Society, vol. 57(3), pages 559-570, May.
    21. Jinpeng Ma, 2002. "original papers : Stable matchings and the small core in Nash equilibrium in the college admissions problem," Review of Economic Design, Springer;Society for Economic Design, vol. 7(2), pages 117-134.
    22. Bergemann & Morris, . "An Introduction to Robust Mechanism Design," Foundations and Trends(R) in Microeconomics, now publishers, vol. 8(3), pages 169-230.
    23. Elliott Peranson & Alvin E. Roth, 1999. "The Redesign of the Matching Market for American Physicians: Some Engineering Aspects of Economic Design," American Economic Review, American Economic Association, vol. 89(4), pages 748-780, September.
    24. Alvin E. Roth, 1982. "The Economics of Matching: Stability and Incentives," Mathematics of Operations Research, INFORMS, vol. 7(4), pages 617-628, November.
    25. Yan Chen & Onur Kesten, 2017. "Chinese College Admissions and School Choice Reforms: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 125(1), pages 99-139.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ehlers, Lars & Massó, Jordi, 2015. "Matching markets under (in)complete information," Journal of Economic Theory, Elsevier, vol. 157(C), pages 295-314.
    2. Ergin, Haluk & Sonmez, Tayfun, 2006. "Games of school choice under the Boston mechanism," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 215-237, January.
    3. Haeringer, Guillaume & Klijn, Flip, 2009. "Constrained school choice," Journal of Economic Theory, Elsevier, vol. 144(5), pages 1921-1947, September.
    4. Abdulkadiroglu, Atila & Andersson, Tommy, 2022. "School Choice," Working Papers 2022:4, Lund University, Department of Economics.
    5. Fuhito Kojima & Parag A. Pathak, 2009. "Incentives and Stability in Large Two-Sided Matching Markets," American Economic Review, American Economic Association, vol. 99(3), pages 608-627, June.
    6. Atila Abdulkadiroglu & Parag A. Pathak & Alvin E. Roth & Tayfun Sönmez, 2006. "Changing the Boston School Choice Mechanism," Boston College Working Papers in Economics 639, Boston College Department of Economics.
    7. Committee, Nobel Prize, 2012. "Alvin E. Roth and Lloyd S. Shapley: Stable allocations and the practice of market design," Nobel Prize in Economics documents 2012-1, Nobel Prize Committee.
    8. Yan Chen & Peter Cramton & John A. List & Axel Ockenfels, 2021. "Market Design, Human Behavior, and Management," Management Science, INFORMS, vol. 67(9), pages 5317-5348, September.
    9. Parag A. Pathak & Tayfun Sönmez, 2013. "School Admissions Reform in Chicago and England: Comparing Mechanisms by Their Vulnerability to Manipulation," American Economic Review, American Economic Association, vol. 103(1), pages 80-106, February.
    10. Atila Abdulkadiroglu & Parag A. Pathak & Alvin E. Roth, 2009. "Strategy-Proofness versus Efficiency in Matching with Indifferences: Redesigning the NYC High School Match," American Economic Review, American Economic Association, vol. 99(5), pages 1954-1978, December.
    11. Kóczy Á., László, 2009. "Központi felvételi rendszerek. Taktikázás és stabilitás [Central admission systems. Stratagems and stability]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 422-442.
    12. Roth, Alvin E. & Sonmez, Tayfun & Utku Unver, M., 2005. "Pairwise kidney exchange," Journal of Economic Theory, Elsevier, vol. 125(2), pages 151-188, December.
    13. Alvin Roth, 2008. "Deferred acceptance algorithms: history, theory, practice, and open questions," International Journal of Game Theory, Springer;Game Theory Society, vol. 36(3), pages 537-569, March.
    14. Alvin E. Roth, 2009. "What Have We Learned from Market Design?," Innovation Policy and the Economy, University of Chicago Press, vol. 9(1), pages 79-112.
    15. EHLERS, Lars, 2010. "School Choice with Control," Cahiers de recherche 2010-05, Universite de Montreal, Departement de sciences economiques.
    16. Chen, Yan & Jiang, Ming & Kesten, Onur & Robin, Stéphane & Zhu, Min, 2018. "Matching in the large: An experimental study," Games and Economic Behavior, Elsevier, vol. 110(C), pages 295-317.
    17. Ma, Jinpeng, 2010. "The singleton core in the college admissions problem and its application to the National Resident Matching Program (NRMP)," Games and Economic Behavior, Elsevier, vol. 69(1), pages 150-164, May.
    18. Atila Abdulkadiroglu & Parag A. Pathak & Alvin E. Roth, 2009. "Strategy-proofness versus Efficiency in Matching with Indifferences: Redesigning the New York City High School Match," NBER Working Papers 14864, National Bureau of Economic Research, Inc.
    19. Troyan, Peter & Morrill, Thayer, 2020. "Obvious manipulations," Journal of Economic Theory, Elsevier, vol. 185(C).
    20. Lars Ehlers & Jordi Massó, 2004. "Incomplete Information and Small Cores in Matching Markets," Working Papers 147, Barcelona School of Economics.

    More about this item

    Keywords

    Many-to-one matching market; stability; incomplete information; monotonic responsive extensions; robust mechanism design;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mtl:montde:2018-02. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sharon BREWER (email available below). General contact details of provider: https://edirc.repec.org/data/demtlca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.