Hostname: page-component-7b9c58cd5d-9klzr Total loading time: 0 Render date: 2025-03-17T07:29:58.539Z Has data issue: false hasContentIssue false
  • English
  • Français

Strategy-proofness in experimental matching markets

Published online by Cambridge University Press:  14 March 2025

Pablo Guillen  and
Róbert F. Veszteg Open the ORCID record for Róbert F. Veszteg [Opens in a new window]
Pablo Guillen*
Affiliation:
Faculty of Economics, The University of Sydney, Level 5, Room 536, A02 - Social Sciences Building, Sydney, NSW 2006, Australia
Róbert F. Veszteg*
Affiliation:
School of Political Science and Economics, Waseda University, 1-6-1 Nishiwaseda, Shinjuku-ku, Tokyo 169-8050, Japan
*
[email protected]
[email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

We introduce two novel matching mechanisms, Reverse Top Trading Cycles (RTTC) and Reverse Deferred Acceptance (RDA), with the purpose of challenging the idea that the theoretical property of strategy-proofness induces high rates of truth-telling in economic experiments. RTTC and RDA are identical to the celebrated Top Trading Cycles (TTC) and Deferred Acceptance (DA) mechanisms, respectively, in all their theoretical properties except that their dominant-strategy equilibrium is to report one’s preferences in the order opposite to the way they were induced. With the focal truth-telling strategy being out of equilibrium, we are able to perform a clear measurement of how much of the truth-telling reported for strategy-proof mechanisms is compatible with rational behaviour and how much of it is caused by confused decision-makers following a default, focal strategy without understanding the structure of the game. In a school-allocation setting, we find that roughly half of the observed truth-telling under TTC and DA is the result of naïve (non-strategic) behaviour. Only 14–31% of the participants choose actions in RTTC and RDA that are compatible with rational behaviour. Furthermore, by looking at the responses of those seemingly rational participants in control tasks, it becomes clear that most lack a basic understanding of the incentives of the game. We argue that the use of a default option, confusion and other behavioural biases account for the vast majority of truthful play in both TTC and DA in laboratory experiments.

Keywords

MatchingStrategy-proofnessTruth-tellingLaboratory experimentSchool choiceRevelation principle

JEL classification

C78: Bargaining Theory • Matching Theory D47: Market Design C91: Laboratory, Individual Behavior
Type
Original Paper
Information
Experimental Economics , Volume 24 , Issue 2 , June 2021 , pp. 650 - 668
Copyright
Copyright © 2020 Economic Science Association

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-020-09665-9) contains supplementary material, which is available to authorized users.

References

Abdulkadiroğlu, A., Pathak, P. A., Roth, A. E., & Sönmez, T. (2006). Changing the Boston school choice mechanism. NBER Working Paper No. 11965..CrossRefGoogle Scholar
Abdulkadiroğlu, A, & Sönmez, T (2003). School choice: A mechanism design approach. American Economic Review, 93(3), 729–747. 10.1257/000282803322157061CrossRefGoogle Scholar
Ashlagi, I, & Gonczarowski, YA (2018). Stable matching mechanisms are not obviously strategy-proof. Journal of Economic Theory, 177, 405–425. 10.1016/j.jet.2018.07.001CrossRefGoogle Scholar
Calsamiglia, C, Haeringer, G, & Klijn, F (2010). Constrained school choice: An experimental study. American Economic Review, 100(4), 1860–1874. 10.1257/aer.100.4.1860CrossRefGoogle Scholar
Chen, Y, Liang, Y, & Sönmez, T (2016). School choice under complete information: An experimental study. Journal of Mechanism and Institution Design, 1(1), 45–82. 10.22574/jmid.2016.12.002CrossRefGoogle Scholar
Chen, Y, & Sönmez, T (2006). School choice: An experimental study. Journal of Economic Theory, 127(1), 202–231. 10.1016/j.jet.2004.10.006CrossRefGoogle Scholar
Ding, T, & Schotter, A (2019). Learning and mechanism design: An experimental test of school matching mechanisms with intergenerational advice. The Economic Journal, 129(623), 2779–2804. 10.1093/ej/uez024CrossRefGoogle Scholar
Fischbacher, U (2007). z-Tree - Zurich toolbox for readymade economic experiments—Experimenter’s manual. Experimental Economics, 10(2), 171–178. 10.1007/s10683-006-9159-4CrossRefGoogle Scholar
Gale, D, & Shapley, L (1962). College admissions and the stability of marriage. American Mathematical Monthly, 69(1), 9–15. 10.1080/00029890.1962.11989827CrossRefGoogle Scholar
Gibbard, A (1973). Manipulation of voting schemes: A general result. Econometrica, 41(4), 587–601. 10.2307/1914083CrossRefGoogle Scholar
Gilboa, I, Kalai, E, & Zemel, E (1993). The complexity of eliminating dominated strategies. Mathematics of Operations Research, 18(3), 553–565. 10.1287/moor.18.3.553CrossRefGoogle Scholar
Guillen, P, & Hakimov, R (2017). Not quite the best response: Truth-telling, strategy-proof matching, and the manipulation of others. Experimental Econconomics, 20, 670–686. 10.1007/s10683-016-9505-0CrossRefGoogle Scholar
Guillen, P, & Hakimov, R (2018). The effectiveness of top-down advice in strategy-proof mechanisms: A field experiment. European Economic Review, 101, 505–511. 10.1016/j.euroecorev.2017.10.020CrossRefGoogle Scholar
Guillen, P, & Hing, A (2014). Lying through their teeth: Third party advice and truth telling in a strategy proof mechanism. European Economic Review, 70(C), 178–185. 10.1016/j.euroecorev.2014.05.002CrossRefGoogle Scholar
Hakimov, R., & Kübler, D. (2019). Experiments on matching markets: A survey. mimeo.Google Scholar
Hassidim, A., Romm, A., & Shorrer, R. I. (2018). ‘Strategic’ behaviour in a strategy-proof environment. Available at SSRN. https://doi.org/10.2139/ssrn.2784659.CrossRefGoogle Scholar
Hassidim, A, Marciano, D, Romm, A, & Shorrer, RI (2017). Mistakes in dominant-strategy mechanisms. The mechanism is truthful, why aren’t you?. American Economic Review: Papers & Proceedings, 107(5), 220–224. 10.1257/aer.p20171027CrossRefGoogle Scholar
Jackson, M. O. (2003). Mechanism theory. In Derigs, U. (Ed.) Optimization and Operations Research, Vol. III. In The encyclopedia of life support systems. Oxford: EOLSS Publishers.Google Scholar
Li, S (2017). Obviously strategy-proof mechanisms. American Economic Review, 107(11), 3257–3287. 10.1257/aer.20160425CrossRefGoogle Scholar
McFadden, D (2009). The human side of mechanism design: A tribute to Leo Hurwicz and Jean–Jacque Laffont. Review of Economic Design, 13(1–2), 77–100. 10.1007/s10058-009-0075-xCrossRefGoogle Scholar
Myerson, R (1981). Optimal auction design. Mathematics of Operations Research, 6(1), 58–73. 10.1287/moor.6.1.58CrossRefGoogle Scholar
Pais, J., & Pintér, Á. (2008). School choice and information: An experimental study on matching mechanisms. Games and Economic Behaviour, 64(1), 303–328.CrossRefGoogle Scholar
Pais, J., Pintér, Á., & Veszteg, R. F. (2011). College admissions and the role of information: An experimental study. International Economic Review, 52(3), 713–737.CrossRefGoogle Scholar
Pathak, P. A. (2017). What really matters in designing school choice mechanisms. In HonorŽ, B., Pakes, A., Piazzesi, M. & Samuelson, L. (Eds.), Advances in Economics and Econometrics: Eleventh World Congress (Econometric Society Monographs, pp. 176–214). Cambridge: Cambridge University Press.Google Scholar
Pathak, PA, & Sönmez, T (2008). Leveling the playing field: Sincere and sophisticated players in the Boston mechanism. American Economic Review, 98(4), 1636–1652. 10.1257/aer.98.4.1636CrossRefGoogle Scholar
Pathak, PA, & Sönmez, T (2013). School admissions reform in Chicago and England: Comparing mechanisms by their vulnerability to manipulation. American Economic Review, 103(1), 80–106. 10.1257/aer.103.1.80CrossRefGoogle Scholar
Rees-Jones, A (2018). Suboptimal behaviour in strategy-proof mechanisms: Evidence from the residency match. Games and Economic Behaviour, 108, 317–330. 10.1016/j.geb.2017.04.011CrossRefGoogle Scholar
Rees-Jones, A, & Skowronek, S (2018). An experimental investigation of preference misrepresentation in the residency match. Proceedings of the National Academy of Sciences, 115(45), 11471–11476. 10.1073/pnas.1803212115CrossRefGoogle ScholarPubMed
Roth, AE, & Sotomayor, MAO (1990). Two-sided matching, A study in game-theoretic modeling and analysis, Cambridge: Cambridge University Press 10.1017/CCOL052139015XCrossRefGoogle Scholar
Roth, AE (1991). A natural experiment in the organization of entry-level labor markets: Regional markets for new physicians and surgeons in the United Kingdom. American Economic Review, 81(3), 415–440.Google ScholarPubMed
Roth, A. E. (2015). Experiments in market design. In Kagel, J. H. Roth, A. E. (Eds.), The handbook of experimental economics (Vol. 2, pp. 290–347). Princeton: Princeton University Press.Google Scholar
Shapley, L, & Scarf, H (1974). On cores and indivisibility. Journal of Mathematical Economics, 1(1), 23–37. 10.1016/0304-4068(74)90033-0CrossRefGoogle Scholar
Shorrer, R. I., & Sóvágó, S. (2018). Obvious mistakes in a strategically simple college admissions environment: Causes and consequences. Available at SSRN,. https://doi.org/10.2139/ssrn.2993538.CrossRefGoogle Scholar
Vickrey, W (1961). Counterspeculation, auctions, and competitive sealed tenders. Journal of Finance, 16(1), 8–37. 10.1111/j.1540-6261.1961.tb02789.xCrossRefGoogle Scholar
Supplementary material: File

Guillen and Veszteg supplementary material

Guillen and Veszteg supplementary material 1
Download Guillen and Veszteg supplementary material(File)
File 91.5 KB
Supplementary material: File

Guillen and Veszteg supplementary material

Guillen and Veszteg supplementary material 2
Download Guillen and Veszteg supplementary material(File)
File 342.5 KB