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Games of Capacity Manipulation in Hospital-Intern Markets

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  • Hideo Konishi

    () (Boston College)

  • M. Utku Unver

    () (KoŸ University)

Abstract

In this paper, we analyze capacity manipulation games in hospital-intern markets inspired by the real-life entry-level labor markets for young physicians seeking residencies at hospitals. In these markets, where the matching is determined by a centralized clearinghouse called the National Residency Matching Program (NRMP) in the USA, hospitals usually report the number of vacant positions to the NRMP as well as their preferences. We consider a model where preferences of hospitals and interns are common knowledge, and hospitals play a game of reporting their capacities. We characterize the equilibria of the game-form for the two most widely used stable rules: hospital-optimal and intern-optimal stable rules. We show that (i) there may not be a pure strategy equilibrium in general; and (ii) when a pure strategy equilibrium exists other than true-capacities, truthful capacity revelation is weakly Pareto-dominated for hospitals. We also analyze other properties of the set of Nash equilibria. Finally, we present sufficient conditions on preferences to guarantee the existence of pure strategy equilibria.

Suggested Citation

  • Hideo Konishi & M. Utku Unver, 2001. "Games of Capacity Manipulation in Hospital-Intern Markets," Boston College Working Papers in Economics 515, Boston College Department of Economics, revised 31 Jul 2002.
  • Handle: RePEc:boc:bocoec:515
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    References listed on IDEAS

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    Cited by:

    1. Ehlers, Lars, 2010. "Manipulation via capacities revisited," Games and Economic Behavior, Elsevier, vol. 69(2), pages 302-311, July.
    2. Assaf Romm, 2014. "Implications of capacity reduction and entry in many-to-one stable matching," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(4), pages 851-875, December.
    3. Ayşe Mumcu & Ismail Saglam, 2009. "Games of capacity allocation in many-to-one matching with an aftermarket," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 33(3), pages 383-403, September.
    4. Fuhito Kojima & M. Ünver, 2014. "The “Boston” school-choice mechanism: an axiomatic approach," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 55(3), pages 515-544, April.
    5. Mustafa Afacan, 2014. "Fictitious students creation incentives in school choice problems," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(3), pages 493-514, August.
    6. Fuhito Kojima & Parag A. Pathak, 2009. "Incentives and Stability in Large Two-Sided Matching Markets," American Economic Review, American Economic Association, pages 608-627.
    7. Mumcu, Ayse & Saglam, Ismail, 2007. "College Admissions under Early Decision," MPRA Paper 1906, University Library of Munich, Germany.
    8. Fuhito Kojima, 2006. "Mixed Strategies in Games of Capacity Manipulation in Hospital–Intern Markets," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 27(1), pages 25-28, August.
    9. Afacan, Mustafa Oǧuz, 2013. "Application fee manipulations in matching markets," Journal of Mathematical Economics, Elsevier, vol. 49(6), pages 446-453.
    10. Marilda Sotomayor, 2012. "A further note on the college admission game," International Journal of Game Theory, Springer;Game Theory Society, vol. 41(1), pages 179-193, February.
    11. Mumcu, Ayse & Saglam, Ismail, 2007. "College Admissions Game: Early Action or Early Decision?," MPRA Paper 3592, University Library of Munich, Germany.
    12. Ergin, Haluk & Sonmez, Tayfun, 2006. "Games of school choice under the Boston mechanism," Journal of Public Economics, Elsevier, pages 215-237.
    13. repec:eee:matsoc:v:87:y:2017:i:c:p:75-84 is not listed on IDEAS
    14. Antonio Romero-Medina & Matteo Triossi, 2013. "Games with capacity manipulation: incentives and Nash equilibria," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, pages 701-720.
    15. Coles Peter A. & Shorrer Ran, 2012. "Correlation in the Multiplayer Electronic Mail Game," The B.E. Journal of Theoretical Economics, De Gruyter, pages 1-25.
    16. repec:eee:mateco:v:72:y:2017:i:c:p:16-24 is not listed on IDEAS
    17. Ehlers, Lars & Hafalir, Isa E. & Yenmez, M. Bumin & Yildirim, Muhammed A., 2014. "School choice with controlled choice constraints: Hard bounds versus soft bounds," Journal of Economic Theory, Elsevier, pages 648-683.
    18. Afacan, Mustafa Oǧuz, 2016. "Enrollment manipulations in school choice," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 119-125.
    19. Coles, Peter & Shorrer, Ran, 2014. "Optimal truncation in matching markets," Games and Economic Behavior, Elsevier, vol. 87(C), pages 591-615.
    20. Mustafa Afacan, 2013. "The welfare effects of pre-arrangements in matching markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(1), pages 139-151, May.
    21. Azevedo, Eduardo M., 2014. "Imperfect competition in two-sided matching markets," Games and Economic Behavior, Elsevier, vol. 83(C), pages 207-223.
    22. Jiao, Zhenhua & Tian, Guoqiang, 2015. "The stability of many-to-many matching with max–min preferences," Economics Letters, Elsevier, vol. 129(C), pages 52-56.

    More about this item

    Keywords

    two-sided matching problem; capacity manipulation; Nash equilibrium;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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