No CrossRef data available.
Article contents
Strategic uncertainty and equilibrium selection in stable matching mechanisms: experimental evidence
Published online by Cambridge University Press: 14 March 2025
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.
- Type
- Original Paper
- Information
- Copyright
- Copyright © 2021 Economic Science Association
Footnotes
Supplementary Information The online version supplementary material available at https://doi.org/10.1007/s10683-021-09702-1.
References
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
Ashlagi, I, & Klijn, F (2012). Manipulability in matching markets: Conflict and coincidence of interests. Social Choice and Welfare, 39(1), 23–33. 10.1007/s00355-011-0549-yCrossRefGoogle Scholar
Barberà, S, & Dutta, B (1995). Protective behavior in matching models. Games and Economic Behavior, 8(2), 281–296. 10.1016/S0899-8256(05)80002-8CrossRefGoogle Scholar
Calford, E, & Oprea, R (2017). Continuity, inertia, and strategic uncertainty: A test of the theory of continuous time games. Econometrica, 85(3), 915–935. 10.3982/ECTA14346CrossRefGoogle Scholar
Camerer, C (2003). Behavioral game theory: Experiments in strategic interaction, Princeton: Princeton University Press.Google Scholar
Castillo, M, & Dianat, A (2016). Truncation strategies in two-sided matching markets: Theory and experiment. Games and Economic Behavior, 98, 180–196. 10.1016/j.geb.2016.06.006CrossRefGoogle Scholar
Coles, PA, & Shorrer, RI (2014). Optimal truncation in matching markets. Games and Economic Behavior, 87, 591–615. 10.1016/j.geb.2014.01.005CrossRefGoogle Scholar
Cooper, RW, DeJong, DV, Forsythe, R, & Ross, TW (1990). Selection criteria in coordination games: Some experimental results. American Economic Review, 80(1), 218–233.Google Scholar
Dal Bó, P, & Fréchette, GR (2011). The evolution of cooperation in infinitely repeated games: Experimental evidence. American Economic Review, 101(1), 411–429. 10.1257/aer.101.1.411CrossRefGoogle Scholar
Dubins, LE, & Freedman, DA (1981). Machiavelli and the Gale–Shapley algorithm. American Mathematical Monthly, 88(7), 485–494. 10.1080/00029890.1981.11995301CrossRefGoogle Scholar
Echenique, F, Wilson, AJ, & Yariv, L (2016). Clearinghouses for two-sided matching: An experimental study. Quantitative Economics, 7, 449–482. 10.3982/QE496CrossRefGoogle Scholar
Embrey, M, Fréchette, GR, & Yuksel, S (2017). Cooperation in the finitely repeated prisoner’s dilemma. The Quarterly Journal of Economics, 133(1), 509–551. 10.1093/qje/qjx033CrossRefGoogle Scholar
Erev, I, & Roth, AE (1998). Predicting how people play games: Reinforcement learning in experimental games with unique, mixed strategy equilibria. American Economic Review, 88, 848–881.Google Scholar
Featherstone, C. R., Mayefsky, E., & Sullivan, C. D. (2019). Learning to manipulate: Out-of-equilibrium truth-telling in matching markets. Working Paper.Google Scholar
Fischbacher, U (2007). z-tree: Zurich toolbox for ready-made economic experiments. Experimental Economics, 10(2), 171–178. 10.1007/s10683-006-9159-4CrossRefGoogle Scholar
Friedman, M (1953). Essays in positive economics, Chicago: University of Chicago Press.Google Scholar
Gale, D, & Sotomayor, M (1985). Ms. machiavelli and the stable matching problem. American Mathematical Monthly, 92(4), 261–268. 10.1080/00029890.1985.11971592CrossRefGoogle Scholar
Hakimov, R., & Kübler, D. (2020). Experiments on centralized school choice and college admissions: A survey. Experimental Economics. https://doi.org/10.1007/s10683-020-09667-7.CrossRefGoogle Scholar
Harrison, G. W., & McCabe, K. A. (1996). Stability and preference distortion in resource matching: An experimental study of the marriage market. Research in Experimental Economics, 6, 53–129.Google Scholar
Harsanyi, JC, & Selten, R (1988). A general theory of equilibrium selection in games, Cambridge: MIT Press.Google Scholar
Hassidim, A, Marciano, D, Romm, A, & Shorrer, RI (2017). The mechanism is truthful, why aren’t you?. American Economic Review, 107(5), 220–24 10.1257/aer.p20171027CrossRefGoogle Scholar
Healy, P. J. (2017). Epistemic experiments: Utilities, beliefs, and irrational play. Working Paper.Google Scholar
Immorlica, N., & Mahdian, M. (2005). Marriage, honesty, and stability. In Proceedings of the sixteenth annual ACM-SIAM symposium on discrete algorithms (pp. 53–62).Google Scholar
Kartal, M., & Müller, W. (2018). A new approach to the analysis of cooperation under the shadow of the future: Theory and experimental evidence. Working Paper.CrossRefGoogle Scholar
Klijn, F, Pais, J, & Vorsatz, M (2013). Preference intensities and risk aversion in school choice: A laboratory experiment. Experimental Economics, 16(1), 1–22. 10.1007/s10683-012-9329-5CrossRefGoogle Scholar
Kojima, F (2006). Risk-dominance and perfect foresight dynamics in n-player games. Journal of Economic Theory, 128(1), 255–273. 10.1016/j.jet.2005.01.006CrossRefGoogle Scholar
Kojima, F, & Pathak, PA (2009). Incentives and stability in large two-sided matching markets. American Economic Review, 99(3), 608–627. 10.1257/aer.99.3.608CrossRefGoogle Scholar
Lee, SM (2016). Incentive compatibility of large centralized matching markets. Review of Economic Studies, 84(1), 444–463. 10.1093/restud/rdw041CrossRefGoogle Scholar
Li, S (2017). Obviously strategy-proof mechanisms. American Economic Review, 107(11), 3257–87 10.1257/aer.20160425CrossRefGoogle Scholar
Morris, S, Rob, R, & Shin, HS (1995). p-dominance and belief potential. Econometrica, 63, 145–157. 10.2307/2951700CrossRefGoogle Scholar
Rankin, FW, Van Huyck, JB, & Battalio, RC (2000). Strategic similarity and emergent conventions: Evidence from similar stag hunt games. Games and Economic Behavior, 32(2), 315–337. 10.1006/game.1999.0711CrossRefGoogle Scholar
Rees-Jones, A (2018). Suboptimal behavior in strategy-proof mechanisms: Evidence from the residency match. Games and Economic Behavior, 108, 317–330. 10.1016/j.geb.2017.04.011CrossRefGoogle Scholar
Roth, AE, & Peranson, E (1999). The redesign of the matching market for American physicians: Some engineering aspects of economic design. American Economic Review, 89(4), 748–780. 10.1257/aer.89.4.748CrossRefGoogle ScholarPubMed
Roth, AE, & Rothblum, UG (1999). Truncation strategies in matching markets—In search of advice for participants. Econometrica, 67(1), 21–43. 10.1111/1468-0262.00002CrossRefGoogle Scholar
Roth, AE, & Sotomayor, MAO (1992). Two-sided matching: A study in game-theoretic modeling and analysis, Cambridge: Cambridge University Press.Google Scholar
Roth, AE, & Vate, JHV (1991). Incentives in two-sided matching with random stable mechanisms. Economic Theory, 1(1), 31–44. 10.1007/BF01210572CrossRefGoogle Scholar
Van Huyck, JB, Battalio, RC, & Beil, RO (1990). Tacit coordination games, strategic uncertainty, and coordination failure. American Economic Review, 80(1), 234–248.Google Scholar
Vespa, E., & Wilson, A. J. (2016). Experimenting with equilibrium selection in dynamic games. Working Paper.Google Scholar
Castillo and Dianat supplementary material
Castillo and Dianat supplementary material 1
File
181.4 KB
Castillo and Dianat supplementary material
Castillo and Dianat supplementary material 2
File
181.6 KB