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Group incentive compatibility and welfare for matching with contracts

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  • Kasuya, Yusuke

Abstract

In the matching with contracts framework, under the assumption that each hospital has a choice function that satisfies the observable substitutability condition, we show that the strategy-proof cumulative offer mechanism is no longer guaranteed to be group strategy-proof, yet it nevertheless outputs a weakly Pareto efficient outcome for any input. We also discuss why, unlike the previous observations in the literature, the equivalence of strategy-proofness and group strategy-proofness does not carry over to our context.

Suggested Citation

  • Kasuya, Yusuke, 2021. "Group incentive compatibility and welfare for matching with contracts," Economics Letters, Elsevier, vol. 202(C).
    • Handle: RePEc:eee:ecolet:v:202:y:2021:i:c:s0165176521001014
    DOI: 10.1016/j.econlet.2021.109824
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    References listed on IDEAS

    as
    1. Kominers, Scott Duke & Sönmez, Tayfun, 2016. "Matching with slot-specific priorities: theory," Theoretical Economics, Econometric Society, vol. 11(2), May.
    2. Kojima, Fuhito, 2008. "The law of aggregate demand and welfare in the two-sided matching market," Economics Letters, Elsevier, vol. 99(3), pages 581-584, June.
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    12. Hatfield, John William & Kojima, Fuhito, 2010. "Substitutes and stability for matching with contracts," Journal of Economic Theory, Elsevier, vol. 145(5), pages 1704-1723, September.
    13. Hirata, Daisuke & Kasuya, Yusuke, 2017. "On stable and strategy-proof rules in matching markets with contracts," Journal of Economic Theory, Elsevier, vol. 168(C), pages 27-43.
    14. Atila Abdulkadiroglu & Tayfun Sönmez, 2003. "School Choice: A Mechanism Design Approach," American Economic Review, American Economic Association, vol. 93(3), pages 729-747, June.
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    More about this item

    Keywords

    Matching with contracts; Observable substitutability; Strategy-proofness; Group strategy-proofness; Pareto efficiency;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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