Incentives and Stability in Large Two-Sided Matching Markets

Posted: 30 Jan 2007

See all articles by Fuhito Kojima

Fuhito Kojima

Harvard University - Department of Economics

Parag A. Pathak

Massachusetts Institute of Technology (MIT) - Department of Economics

Abstract

The paper analyzes the scope for manipulation in many-to-one matching markets (college admission problems) under the student-optimal stable mechanism when the number of participants is large and the length of the preference list is bounded. Under a mild independence assumption on the distribution of preferences for students, the fraction of colleges that have incentives to misrepresent their preferences approaches zero as the market becomes large. We show that truthful reporting is an approximate equilibrium under the student-optimal stable mechanism in large markets that are sufficiently thick, a condition that allows for certain types of heterogeneity in the distribution of student preferences.

Keywords: Large markets, stability, two-sided matching

JEL Classification: C78, D61, D78.

Suggested Citation

Kojima, Fuhito and Pathak, Parag A., Incentives and Stability in Large Two-Sided Matching Markets. Available at SSRN: https://ssrn.com/abstract=959937

Fuhito Kojima

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

Parag A. Pathak (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
E52-391
Cambridge, MA 02142
United States

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