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Games with Capacity Manipulation: Incentives and Nash Equilibria

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  • Antonio Romero-Medina
  • Matteo Triossi

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Abstract

Studying the interaction between preference and capacity manipulation in matching markets, we prove that acyclicity is a necessary and su!cient condition that guarantees the stability of a Nash equilibrium and the strategy-proofness of truthful capacity revelation under the hospital-optimal and intern-optimal stable rules. we then introduce generalized capacity manipulations games where hospitals move first and state their capacities, and interns are subsequently assigned to hospitals using a sequential mechanism. In this setting, we first consider stable revelation mechanisms and introduce conditions guaranteeing the stability of the outcome. Next, we prove that every stable non-revelation mechanism leads to unstable allocations, unless restrictions on the preferences of the agents are introduced. JEL Classification Numbers: C71, C78, D71, D78.

Suggested Citation

  • Antonio Romero-Medina & Matteo Triossi, 2011. "Games with Capacity Manipulation: Incentives and Nash Equilibria," Documentos de Trabajo 280, Centro de Economía Aplicada, Universidad de Chile.
  • Handle: RePEc:edj:ceauch:280
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    Citations

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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. Akahoshi, Takashi, 2014. "Singleton core in many-to-one matching problems," Mathematical Social Sciences, Elsevier, vol. 72(C), pages 7-13.
    3. 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.
    4. Romero-Medina, Antonio & Triossi, Matteo, 2013. "Acyclicity and singleton cores in matching markets," Economics Letters, Elsevier, vol. 118(1), pages 237-239.
    5. Tello Benjamín, 2018. "Stability of Equilibrium Outcomes under Deferred Acceptance: Acyclicity and Dropping Strategies," Working Papers 2018-05, Banco de México.
    6. repec:spr:sochwe:v:48:y:2017:i:3:d:10.1007_s00355-016-1024-6 is not listed on IDEAS
    7. Triossi, Matteo & Romero-Medina, Antonio, 2017. "Two-sided strategy-proofness in many-to-many matching markets," UC3M Working papers. Economics 26081, Universidad Carlos III de Madrid. Departamento de Economía.

    More about this item

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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