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Local Non-Bossiness

Author

Listed:
  • Juan Pereyra

  • Eduardo Duque-Rosas
  • Juan Pablo Torres-Martínez

Abstract

The student-optimal stable mechanism (DA), the most popular mechanism in school choice, is the only one that is stable and strategy-proof. However, when DA is implemented, a student can change the schools of others without changing her own. We show that this drawback is limited: a student cannot change her schoolmates while remaining in the same school. We refer to this new property as local non-bossiness and use it to provide a new characterization of DA that does not rely on stability. Furthermore, we show that local non-bossiness plays a crucial role in providing incentives to be truthful when students have preferences over their colleagues. As long as students first consider the school to which they are assigned and then their schoolmates, DAinduces the only stable and strategy-proof mechanism. There is limited room to expand this preference domain without compromising the existence of a stable and strategy-proof mechanism.

Suggested Citation

  • Juan Pereyra & Eduardo Duque-Rosas & Juan Pablo Torres-Martínez, 2025. "Local Non-Bossiness," Documentos de Trabajo/Working Papers 2510, Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo..
    • Handle: RePEc:mnt:wpaper:2510
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    File URL: https://www2.um.edu.uy/fcee_papers/2020/Local_Non_Bossiness.pdf
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    Keywords

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    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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