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Non-standard choice in matching markets

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  • Caspari, Gian
  • Khanna, Manshu

Abstract

We explore the possibility of designing matching mechanisms that can accommodate non-standard choice behavior. We pin down the necessary and sufficient conditions on participants' choice behavior for the existence of stable and incentive compatible mechanisms. Our results imply that well-functioning matching markets can be designed to adequately accommodate a plethora of choice behaviors, including the standard behavior that is consistent with preference maximization. To illustrate the significance of our results in practice, we show that a simple modification in a commonly used matching mechanism enables it to accommodate non-standard choice behavior.

Suggested Citation

  • Caspari, Gian & Khanna, Manshu, 2022. "Non-standard choice in matching markets," ZEW Discussion Papers 22-054, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:22054
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    More about this item

    Keywords

    Matching Theory; Market Design; Stability; College Admissions Market;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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