Technical Report On Stable and Strategy-Proof Rules in Matching Markets with Contracts

HIRATA, Daisuke  ,  KASUYA, Yusuke

2016-12 , Graduate School of Economics, Hitotsubashi University
This Version: December, 2016
This paper studies stable and (one-sided) strategy-proof rules in many-to-one matching markets with contracts. Not assuming any kind of substitutes condition or the law of aggregate demand, we obtain the following results. First, the number of stable and strategy-proof rules is at most one. Second, the doctor-optimal stable rule, whenever it exists, is the unique candidate for a stable and strategy-proof rule. Third, a stable and strategy-proof rule, whenever it exists, is second-best optimal for doctor welfare, in that no individually rational and strategy-proof rule can dominate it. This last result is further generalized to non-wasteful and strategy-proof rules. Due to the weak assumptions, our analysis covers a broad range of markets, including cases where a (unique) stable and strategy-proof rule is not equal to the one induced by the cumulative offer process or the deferred acceptance algorithm.

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