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Compromises and Rewards: Stable and Non-manipulable Probabilistic Pairing

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Author

  • Jens Gudmundsson

Summary, in English

Can we reconcile stability with non-manipulability in pairing problems by selecting lotteries over matchings?We examine the problem of eliciting preferences to make pairs as introduced by Gale and Shapley (1962). We develop ex-ante notions of stability and non-manipulability that are parameterized by collections of utility functions. In particular, we study the collection of utility functions with increasing differences for which stability and non-manipulability turn out to characterize Compromises and Rewards. This is a novel rule that is fundamentally different from the one that has attracted most attention in the literature, Deferred Acceptance.

Publishing year

2015

Language

English

Publication/Series

Working Paper / Department of Economics, School of Economics and Management, Lund University

Issue

32

Document type

Working paper

Publisher

Department of Economics, Lund University

Topic

  • Economics

Keywords

  • Rewards
  • Compromises
  • Non-manipulability
  • Stability
  • Lottery
  • Pairing

Status

Published