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The welfare effects of pre-arrangements in matching markets

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  • Mustafa Afacan

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    Abstract

    We study the welfare effects of different types of pre-arrangements (as identified in Sönmez in J Econ Theory 86:148–156, 1999 ) under the intern-optimal and hospital-optimal stable mechanisms in matching markets. First, both mechanisms are manipulable via Type-2 pre-arrangements. Regarding the welfare consequences, they might cause inefficient outcomes to arise, and the welfare effects on each side are ambiguous in the sense that there might be agents from each side, apart from pre-arranging ones, being better and worse off. Then, for Type-1 pre-arrangements, due to Kojima and Pathak (Am Econ Rev 99(3):608–627, 2009 ), we know that the intern-optimal stable mechanism is immune to this type of manipulations. In contrast to this result, the hospital-optimal stable mechanism turns out to be manipulable. More interestingly, they do not result in inefficient outcomes, and the welfare effects on each side are unambiguous: All hospitals (interns) are better (worse) off. Copyright Springer-Verlag 2013

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    Bibliographic Info

    Article provided by Springer in its journal Economic Theory.

    Volume (Year): 53 (2013)
    Issue (Month): 1 (May)
    Pages: 139-151

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    Handle: RePEc:spr:joecth:v:53:y:2013:i:1:p:139-151

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    Related research

    Keywords: Unraveling; Pre-arrangement; Welfare; matching; Stability; C71; C78; J44;

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    1. Lars-Gunnar Svensson, 2009. "Coalitional strategy-proofness and fairness," Economic Theory, Springer, vol. 40(2), pages 227-245, August.
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    Cited by:
    1. Afacan, Mustafa Oǧuz, 2013. "Application fee manipulations in matching markets," Journal of Mathematical Economics, Elsevier, vol. 49(6), pages 446-453.

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