Incentives in Three-Sided Markets

23 Pages Posted: 18 Nov 2022

See all articles by Jorge Arenas

Jorge Arenas

Department of Economics, University of Chile

Juan Pablo Torres-Martínez

Department of Economics, University of Chile

Date Written: November 4, 2022

Abstract

In a class of three-sided matching problems in which the core is non-empty, we show that no stable mechanism is strategy-proof for those who internalize the trilateral structure of the market in their preferences. This impossibility is related to the incompatibility between stability, one-sided strategy-proofness, and one-sided non-bossiness in two-sided markets. Furthermore, unlike what happens in marriage markets, strong restrictions on preferences are needed to ensure that stability and one-sided strategy-proofness are compatible for each market side.

Keywords: Three-Sided Matching Markets, Stability, Strategy-proofness

JEL Classification: D47, C78

Suggested Citation

Arenas Molina, Jorge Ignacio and Torres-Martínez, Juan Pablo, Incentives in Three-Sided Markets (November 4, 2022). Available at SSRN: https://ssrn.com/abstract=4268699 or http://dx.doi.org/10.2139/ssrn.4268699

Jorge Ignacio Arenas Molina

Department of Economics, University of Chile ( email )

Diagonal Paraguay, 257, Santiago
Santiago, R. Metropolitana 7520421
Chile

Juan Pablo Torres-Martínez (Contact Author)

Department of Economics, University of Chile ( email )

HOME PAGE: http://www.econ.uchile.cl/es/academico/jutorres

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