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Strategic uncertainty and equilibrium selection in stable matching mechanisms: experimental evidence

Castillo, Marco and Dianat, Ahrash (2021) 'Strategic uncertainty and equilibrium selection in stable matching mechanisms: experimental evidence.' Experimental Economics, 24 (4). pp. 1365-1389. ISSN 1386-4157

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Abstract

We present experimental evidence on the interplay between strategic uncertainty and equilibrium selection in stable matching mechanisms. In particular, we apply a version of risk-dominance to compare the riskiness of “truncation” against other strategies that secure against remaining unmatched. By keeping subjects’ ordinal preferences fixed while changing their cardinal representation, our experimental treatments vary the risk-dominant prediction. We find that both truth-telling and truncation are played more often when they are risk-dominant. In both treatments, however, truncation strategies are played more often in later rounds of the experiment. Our results also shed light on several open questions in market design.

Item Type: Article
Uncontrolled Keywords: stable matching; equilibrium selection; risk-dominance
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Economics, Department of
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 27 Jan 2021 13:22
Last Modified: 14 Feb 2022 02:00
URI: http://repository.essex.ac.uk/id/eprint/29626

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