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Designing Matching Mechanisms under Constraints: An Approach from Discrete Convex Analysis

Author

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  • Kojima, Fuhito
  • Tamura, Akihisa
  • Yokoo, Makoto

Abstract

In this paper, we consider two-sided, many-to-one matching problems where agents in one side of the market (hospitals) impose some distributional constraints (e.g., a minimum quota for each hospital). We show that when the preference of the hospitals is represented as an M-natural-concave function, the following desirable properties hold: (i) the time complexity of the generalized GS mechanism is O(|X|^3), where |X| is the number of possible contracts, (ii) the generalized Gale & Shapley (GS) mechanism is strategyproof, (iii) the obtained matching is stable, and (iv) the obtained matching is optimal for the agents in the other side (doctors) within all stable matchings. Furthermore, we clarify sufficient conditions where the preference becomes an M-natural-concave function. These sufficient conditions are general enough so that they can cover most of existing works on strategyproof mechanisms that can handle distributional constraints in many-to-one matching problems. These conditions provide a recipe for non-experts in matching theory or discrete convex analysis to develop desirable mechanisms in such settings.

Suggested Citation

  • Kojima, Fuhito & Tamura, Akihisa & Yokoo, Makoto, 2014. "Designing Matching Mechanisms under Constraints: An Approach from Discrete Convex Analysis," MPRA Paper 56189, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:56189
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    References listed on IDEAS

    as
    1. 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, vol. 153(C), pages 648-683.
    2. Satoru Fujishige & Akihisa Tamura, 2007. "A Two-Sided Discrete-Concave Market with Possibly Bounded Side Payments: An Approach by Discrete Convex Analysis," Mathematics of Operations Research, INFORMS, vol. 32(1), pages 136-155, February.
    3. John William Hatfield & Paul R. Milgrom, 2005. "Matching with Contracts," American Economic Review, American Economic Association, vol. 95(4), pages 913-935, September.
    4. Tayfun Sönmez & Tobias B. Switzer, 2013. "Matching With (Branch‐of‐Choice) Contracts at the United States Military Academy," Econometrica, Econometric Society, vol. 81(2), pages 451-488, March.
    5. Alvin E. Roth, 2002. "The Economist as Engineer: Game Theory, Experimentation, and Computation as Tools for Design Economics," Econometrica, Econometric Society, vol. 70(4), pages 1341-1378, July.
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    Cited by:

    1. Masahiro Goto & Fuhito Kojima & Ryoji Kurata & Akihisa Tamura & Makoto Yokoo, 2017. "Designing Matching Mechanisms under General Distributional Constraints," American Economic Journal: Microeconomics, American Economic Association, vol. 9(2), pages 226-262, May.
    2. Kazuo Murota, 2018. "Multiple Exchange Property for M ♮ -Concave Functions and Valuated Matroids," Mathematics of Operations Research, INFORMS, vol. 43(3), pages 781-788, August.
    3. Goto, Masahiro & Kojima, Fuhito & Kurata, Ryoji & Tamura, Akihisa & Yokoo, Makoto, 2015. "Designing Matching Mechanisms under General Distributional Constraints," MPRA Paper 64000, University Library of Munich, Germany.
    4. Kazuo Murota, 2016. "Discrete convex analysis: A tool for economics and game theory," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 1(1), pages 151-273, December.

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    More about this item

    Keywords

    two-sided matching; many-to-one matching; strategyproof mechanism; deferred acceptance; distributional constraints; discrete convex analysis;
    All these keywords.

    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
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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