Can we reconcile stability with non-manipulability in pairing problems by selecting lotteries over matchings?We examine the problem of eliciting preferences to make pairs as introduced by Gale and Shapley (1962). We develop ex-ante notions of stability and non-manipulability that are parameterized by collections of utility functions. In particular, we study the collection of utility functions with increasing differences for which stability and non-manipulability turn out to characterize Compromises and Rewards. This is a novel rule that is fundamentally different from the one that has attracted most attention in the literature, Deferred Acceptance.
|Research areas and keywords
- Rewards, Compromises, Non-manipulability, Stability, Lottery, Pairing
|Publisher||Department of Economics, Lund Universtiy|
|Number of pages||27|
|Publication status||Published - 2015|
|Name||Working Paper / Department of Economics, School of Economics and Management, Lund University|