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Dynamic Matching Markets and the Deferred Acceptance Mechanism

Author

Listed:
  • John Kennes

    (Department of Economics and Business Economics, Aarhus University, Denmark)

  • Daniel Monte

    (Department of Economics and Business Economics, Aarhus University, Denmark and Sao Paulo School of Economics, Brazil)

  • Norovsambuu Tumennasan

    (Department of Economics and Business Economics, Aarhus University, Denmark and Department of Economics, Dalhousie University, Canada)

Abstract

In many dynamic matching markets, priorities depend on previous allocations. In such environments, agents on the proposing side can manipulate the period-by-period deferred acceptance (DA) mechanism. We show that the fraction of agents with incentives to manipulate the DA mechanism approaches zero as the market size increases. In addition, we provide a novel al- gorithm to calculate the percentage of markets that can be manipulated. Based on randomly generated data, we find that the DA becomes approximately non-manipulable when the schools capacity reaches 20. Our theoretical and simulation results together justify the implementation of the period-by-period DA mechanism in dynamic markets.

Suggested Citation

  • John Kennes & Daniel Monte & Norovsambuu Tumennasan, 2015. "Dynamic Matching Markets and the Deferred Acceptance Mechanism," Economics Working Papers 2015-23, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2015-23
    as

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    File URL: https://repec.econ.au.dk/repec/afn/wp/15/wp15_23.pdf
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Dynamic matching when what you get now may determine your future priorities
      by Al Roth in Market Design on 2016-02-15 17:46:00

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    Cited by:

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    2. Kotowski, Maciej H., 2015. "A Note on Stability in One-to-One, Multi-period Matching Markets," Working Paper Series rwp15-042, Harvard University, John F. Kennedy School of Government.

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    More about this item

    Keywords

    Large market; dynamic school choice; deferred acceptance mechanism;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • I20 - Health, Education, and Welfare - - Education - - - General

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