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Stable Matchings and the Small Core in Nash Equilibrium in the College Admissions Problem

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  • Jinpeng Ma

Abstract

Both rematching proof and strong equilibrium outcomes are stable with respect to the true preferences in the marriage problem. We show that not all rematching proof or strong equilibrium outcomes are stable in the college admissions problem. But we show that both rematching proof and strong equilibrium outcomes with truncations at the match point are all stable in the college admissions problem. Further, all true stable matchings can be achieved in both rematching proof and strong equilibrium with truncations at the match point. We show that any Nash equilibrium in truncations admits one and only one matching, stable or not. Therefore, the core at a Nash equilibrium in truncations must be small. But examples exist such that the set of stable matchings with respect to a Nash equilibrium may contain more than one matching. Nevertheless, each Nash equilibrium can only admit at most one true stable matching. If, indeed, there is a true stable matching at a Nash equilibrium, then the only possible equilibrium outcome will be the true stable matching, no matter how players manipulate their equilibrium strategies and how many other unstable matchings are there at the Nash equilibrium. Thus, we show that a necessary and sufficient condition for the stable matching rule to be implemented in a subset of Nash equilibria by a direct revelation game induced by a stable matching mechanism is that every Nash equilibrium profile in that subset admits one and only one true stable matching.

Suggested Citation

  • Jinpeng Ma, 1998. "Stable Matchings and the Small Core in Nash Equilibrium in the College Admissions Problem," Discussion Papers 1247, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  • Handle: RePEc:nwu:cmsems:1247
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    File URL: http://www.kellogg.northwestern.edu/research/math/papers/1247.pdf
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    References listed on IDEAS

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    1. Danilov, Vladimir, 1992. "Implementation via Nash Equilibria," Econometrica, Econometric Society, vol. 60(1), pages 43-56, January.
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    Cited by:

    1. Fuhito Kojima & Parag A. Pathak, 2009. "Incentives and Stability in Large Two-Sided Matching Markets," American Economic Review, American Economic Association, pages 608-627.

    More about this item

    JEL classification:

    • 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

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