Deferred acceptance and regret-free truth-telling

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Date
2018-06-01
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Abstract
The deferred acceptance mechanism has been widely adopted across centralized matching markets, despite the fact that it provides participants with opportunities to “game the system.” Accounting for the lack of information that participants typically have in these markets in practice, I introduce a new notion of behavior under uncertainty that captures participants’ aversion to experience regret. I show that participants optimally choose not to manipulate the deferred acceptance mechanism in order to avoid regret. Moreover, the deferred acceptance mechanism is the unique mechanism within an interesting class (quantile-stable) to induce honesty from participants in this way.
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Keywords
Market design, Deferred acceptance, Gale-Shapley, Regret, Regret-Free, Regret-FreeTruth-Telling, Manipulation, Stable mechanisms, two-sided matching
Citation
Fernandez, Marcelo Ariel (2018) Essays in Market Design. Dissertation (Ph.D.), California Institute of Technology. doi:10.7907/PXYF-WS15. https://resolver.caltech.edu/CaltechTHESIS:05312018-141046982