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On stable and strategy-proof rules in matching markets with contracts

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  • Hirata, Daisuke
  • Kasuya, Yusuke

Abstract

This paper studies stable and (one-sided) strategy-proof rules in many-to-one matching markets with contracts. Not assuming any kind of substitutes condition or the law of aggregate demand, we obtain the following results. First, the number of stable and strategy-proof rules is at most one. Second, the doctor-optimal stable rule, whenever it exists, is the unique candidate for a stable and strategy-proof rule. Third, a stable and strategy-proof rule, whenever it exists, is second-best optimal for doctor welfare, in that no individually rational and strategy-proof rule can dominate it. This last result is further generalized to non-wasteful and strategy-proof rules. Due to the weak assumptions, our analysis covers a broad range of markets, including cases where a (unique) stable and strategy-proof rule is not equal to the one induced by the cumulative offer process or the deferred acceptance algorithm.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:jetheo:v:168:y:2017:i:c:p:27-43
    DOI: 10.1016/j.jet.2016.12.005
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    References listed on IDEAS

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    Cited by:

    1. Jan Christoph Schlegel, 2016. "Virtual Demand and Stable Mechanisms," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 16.11, Université de Lausanne, Faculté des HEC, DEEP.
    2. repec:the:publsh:2717 is not listed on IDEAS
    3. Mustafa Oǧuz Afacan, 2016. "Characterizations of the cumulative offer process," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(3), pages 531-542, October.
    4. HIRATA, Daisuke & KASUYA, Yusuke, 2016. "Supplementary Note to “On Stable and Strategy-Proof Rules in Matching Markets with Contracts”," Discussion Papers 2016-14, Graduate School of Economics, Hitotsubashi University.

    More about this item

    Keywords

    Matching with contracts; Stability; Strategy-proofness; Uniqueness; Efficiency; Irrelevance of rejected contracts;

    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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