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Truncation strategies in two-sided matching markets: Theory and experiment

Castillo, M and Dianat, A (2016) 'Truncation strategies in two-sided matching markets: Theory and experiment.' Games and Economic Behavior, 98. 180 - 196. ISSN 0899-8256

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Abstract

We investigate strategic behavior in a centralized matching clearinghouse based on the Gale–Shapley deferred acceptance algorithm. To do so, we conduct a laboratory experiment to test the degree to which agents strategically misrepresent their preferences by submitting a “truncation” of their true preferences. Our experimental design uses a restricted environment in which a particular form of truncation is always a best response. We find that subjects do not truncate their preferences more often when truncation is profitable. They do, however, truncate their preferences less often when truncation is dangerous – that is, when there is a risk of “over-truncating” and remaining unmatched. Our findings suggest that behavioral insights can play an important role in the field of market design.

Item Type: Article
Uncontrolled Keywords: Two-sided matching, Truncation strategies, Experiments
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Elements
Date Deposited: 12 Jan 2018 17:04
Last Modified: 12 Jan 2018 17:04
URI: http://repository.essex.ac.uk/id/eprint/21015

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