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Equivalent Choice Functions and Stable Mechanisms

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  • Jan Christoph Schlegel

Abstract

We study conditions for the existence of stable and group-strategy-proof mechanisms in a many-to-one matching model with contracts if students' preferences are monotone in contract terms. We show that "equivalence", properly defined, to a choice profile under which contracts are substitutes and the law of aggregate holds is a necessary and sufficient condition for the existence of a stable and group-strategy-proof mechanism. Our result can be interpreted as a (weak) embedding result for choice functions under which contracts are observable substitutes and the observable law of aggregate demand holds.

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  • Jan Christoph Schlegel, 2018. "Equivalent Choice Functions and Stable Mechanisms," Papers 1812.10326, arXiv.org, revised Jul 2021.
    • Handle: RePEc:arx:papers:1812.10326
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    References listed on IDEAS

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    Cited by:

    1. Kasuya, Yusuke, 2021. "Group incentive compatibility and welfare for matching with contracts," Economics Letters, Elsevier, vol. 202(C).

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    More about this item

    JEL classification:

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

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