Making Auctions Work in Practice Is Worth a Nobel
Citation:
Kominers, Scott Duke. "Making Auctions Work in Practice Is Worth a Nobel." Bloomberg Opinion (October 12, 2020). View Details|
Article Review of Economic Studies Forthcoming Stability, Strategy-Proofness, and Cumulative Offer Mechanisms |
Abstract
We consider the setting of many-to-one matching with contracts, where firms may demand multiple contracts, but each worker desires at most one contract. We introduce three novel conditions—observable substitutability, observable size monotonicity, and non-manipulatability—and show that when these conditions are satisfied, the cumulative offer mechanism is the unique mechanism that is stable and strategy-proof (for workers). Moreover, when the choice function of some firm fails any of our three conditions, one can construct unit-demand choice functions for the other firms such that no stable and strategy-proof mechanism exists. In the final part of the paper, we characterize the class of choice functions for which the cumulative offer mechanism is guaranteed to yield a stable outcome.
Keywords: Matching with Contracts; stability; Strategy-proofness; Substitutability; Size monotonicity; Cumulative offer mechanism; Marketplace Matching; Balance and Stability;
Citation:
Hatfield, John William, Scott Duke Kominers, and Alexander Westkamp. "Stability, Strategy-Proofness, and Cumulative Offer Mechanisms." Review of Economic Studies (forthcoming).
