Stability, Strategy-Proofness, and Respecting-Improvements Properties

95 Pages Posted: 8 Jul 2021 Last revised: 28 Jul 2021

See all articles by Daisuke Hirata

Daisuke Hirata

Hitotsubashi University

Yusuke Kasuya

Kobe University - Faculty of Economics

Yasunori Okumura

Tokyo University of Marine Science and Technology - Department of Logistics and Information Engineering

Date Written: July 7, 2021

Abstract

In priority-based two-sided matchings, a respecting-improvements property of a mechanism requires that an agent should get weakly better off when she is assigned a higher priority. Not only is it a normative desideratum, it is also important for ex-ante investments and for disclosure of non-preference information. In the general model of matching with contracts, we demonstrate that respect for improvements is closely related to strategy-proofness (with respect to preference information): With a number of different sets of assumptions and two definitions of improvements, a stable mechanism respects improvements if and ``almost'' only if it is strategy-proof, although the precise statements vary across different layers of our assumptions. Our results suggest that strategy-proofness is desirable not only as a strategic property, but also for its normative implication. We also provide a new sufficient condition for the cumulative offer mechanism to be strategy-proof, which also suffices for respect for improvements.

Keywords: cumulative offer mechanism, matching with contracts, respect for improvements, stability, strategy-proofness

JEL Classification: C78, D47

Suggested Citation

Hirata, Daisuke and Kasuya, Yusuke and Okumura, Yasunori, Stability, Strategy-Proofness, and Respecting-Improvements Properties (July 7, 2021). Available at SSRN: https://ssrn.com/abstract=3876865 or http://dx.doi.org/10.2139/ssrn.3876865

Daisuke Hirata (Contact Author)

Hitotsubashi University ( email )

2-1 Naka Kunitachi-shi
Tokyo 186-8601
Japan

Yusuke Kasuya

Kobe University - Faculty of Economics ( email )

2-1, Rokkodai
Nada-Ku
Kobe, Hyogo, 657-8501
Japan

Yasunori Okumura

Tokyo University of Marine Science and Technology - Department of Logistics and Information Engineering ( email )

2-1-6 Etchu-Jima
Koto-ku, Tokyo, 135-8533
Japan

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