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Incentives and Stability in Large Two-Sided Matching Markets

Author

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  • Fuhito Kojima
  • Parag A. Pathak

Abstract

A number of labor markets and student placement systems can be modeled as many-to-one matching markets. We analyze the scope for manipulation in many-to-one matching markets under the student-optimal stable mechanism when the number of participants is large. Under some regularity conditions, we show that the fraction of participants with incentives to misrepresent their preferences when others are truthful approaches zero as the market becomes large. With an additional condition, truthful reporting by every participant is an approximate equilibrium under the student-optimal stable mechanism in large markets. (JEL C78)

Suggested Citation

  • Fuhito Kojima & Parag A. Pathak, 2009. "Incentives and Stability in Large Two-Sided Matching Markets," American Economic Review, American Economic Association, vol. 99(3), pages 608-627, June.
  • Handle: RePEc:aea:aecrev:v:99:y:2009:i:3:p:608-27
    Note: DOI: 10.1257/aer.99.3.608
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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