Dominance Invariant Roommate Problems
22 Pages Posted: 16 Jun 2012
Date Written: January 4, 2012
Solution concepts in social environments use either a direct or indirect dominance relationship, depending on whether it is assumed that agents are myopic or farsighted. Direct dominance implies indirect dominance, but not the reverse. Hence, the predicted outcomes when assuming myopic (direct) or farsighted (indirect) agents could be very different. In this paper, we characterize dominance invariant roommate problems when preferences are strict. That is, we obtain the conditions on preference profiles such that indirect dominance implies direct dominance in roommate problems and give these an intuitive interpretation. Whenever some of the conditions are not satisfied, it is important to know the kind of agents that are being investigated in order to use the appropriate stability concept. Furthermore, we characterize dominance invariant roommate problems having a non-empty core. Finally, we show that, if the core of a dominance invariant roommate problem is not empty, it contains a unique matching, the dominance invariant stable matching, in which all agents who mutually top rank each other are matched to one another and all other agents remain unmatched.
Keywords: roommate problems, direct dominance, indirect dominance
JEL Classification: C71, C78
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