Equilibria under Deferred Acceptance: Dropping Strategies, Filled Positions, and Welfare
This paper studies many-to-one matching markets where each student is assigned to a hospital. Each hospital has possibly multiple positions and responsive preferences. We study the game induced by the student-optimal stable matching mechanism. We assume that students play their weakly dominant strategy of truth-telling. Roth and Sotomayor (1990) showed that there can be unstable equilibrium outcomes. We prove that any stable matching can be obtained in some equilibrium. We also show that the exhaustive class of dropping strategies does not necessarily generate the full set of equilibrium outcomes. Finally, we find that the so-called "rural hospital theorem" cannot be extended to the set of equilibrium outcomes and that welfare levels are in general unrelated to the set of stable matchings. Two important consequences are that, contrary to one-to-one matching markets, (a) filled positions depend on the particular equilibrium that is reached and (b) welfare levels are not bounded by the student and hospital-optimal stable matchings (with respect to the true preferences).
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- Klijn, Flip & Yazıcı, Ayşe, 2014.
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- Flip Klijn, 2011. "A Many-to-Many 'Rural Hospital Theorem'," UFAE and IAE Working Papers 877.11, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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- Paula Jaramillo & Çagatay Kayi & Flip Klijn, 2012.
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632, Barcelona Graduate School of Economics.
- Paula Jaramillo & Çaǧatay Kayı & Flip Klijn, 2014. "On the exhaustiveness of truncation and dropping strategies in many-to-many matching markets," Social Choice and Welfare, Springer, vol. 42(4), pages 793-811, April.
- Paula Jaramillo & Cagatay Kay & Flip Klijn, 2012. "On the Exhaustiveness of Truncation and Dropping Strategies in Many-to-Many Matching Markets," DOCUMENTOS CEDE 010316, UNIVERSIDAD DE LOS ANDES-CEDE.
- Paula Jaramillo & Kagi Cagatay & Flip Klijn, 2012. "On the exhaustiveness of truncation and dropping strategies in many-to-many matching markets," DOCUMENTOS DE TRABAJO 009997, UNIVERSIDAD DEL ROSARIO.
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- Marilda Sotomayor, 2012. "A further note on the college admission game," International Journal of Game Theory, Springer, vol. 41(1), pages 179-193, February.
- Roth, Alvin E & Vande Vate, John H, 1991. "Incentives in Two-Sided Matching with Random Stable Mechanisms," Economic Theory, Springer, vol. 1(1), pages 31-44, January.
- Roth, Alvin E, 1984. "The Evolution of the Labor Market for Medical Interns and Residents: A Case Study in Game Theory," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 991-1016, December.
- Blum, Yosef & Roth, Alvin E. & Rothblum, Uriel G., 1997. "Vacancy Chains and Equilibration in Senior-Level Labor Markets," Journal of Economic Theory, Elsevier, vol. 76(2), pages 362-411, October.
- 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 608-27, June.
- Roth, Alvin E & Sotomayor, Marilda, 1989. "The College Admissions Problem Revisited," Econometrica, Econometric Society, vol. 57(3), pages 559-70, May.
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