Monday, February 15, 2016

Dynamic matching when what you get now may determine your future priorities

Dynamic Matching Markets and the Deferred Acceptance Mechanism

John Kennes (, Daniel Monde and Norovsambuu Tumennasan (
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Abstract: In many dynamic matching markets, priorities depend on previous allocations. In such environments, agents on the proposing side can manipulate the period-by-period deferred acceptance (DA) mechanism. We show that the fraction of agents with incentives to manipulate the DA mechanism approaches zero as the market size increases. In addition, we provide a novel al- gorithm to calculate the percentage of markets that can be manipulated. Based on randomly generated data, we find that the DA becomes approximately non-manipulable when the schools capacity reaches 20. Our theoretical and simulation results together justify the implementation of the period-by-period DA mechanism in dynamic markets.

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