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Stable Matching Mechanisms are Not Obviously Strategy-Proof

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 Publication date 2015
and research's language is English




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Many two-sided matching markets, from labor markets to school choice programs, use a clearinghouse based on the applicant-proposing deferred acceptance algorithm, which is well known to be strategy-proof for the applicants. Nonetheless, a growing amount of empirical evidence reveals that applicants misrepresent their preferences when this mechanism is used. This paper shows that no mechanism that implements a stable matching is obviously strategy-proof for any side of the market, a stronger incentive property than strategy-proofness that was introduced by Li (2017). A stable mechanism that is obviously strategy-proof for applicants is introduced for the case in which agents on the other side have acyclical preferences.



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Consider the problem of implementing a revenue-optimal, Bayesian Incentive Compatible auction when buyers values are drawn from distributions $times_i D_i$ on a particular instance $vec{v}$. Optimal single-dimensional mechanisms are local: in order to allocate the item correctly on a particular valuation profile $vec{v}$, only $tilde{O}(1)$ bits are needed from each player (specifically, their Myerson virtual value [Mye81]), rather than the entire distribution. We show that optimal multi-dimensional mechanisms are not local: in order to allocate the item correctly on a particular valuation profile $vec{v}$, one still needs to know (essentially) the entire distribution. Specifically, if the distributions have support-size $n$, then $Omega(n)$ bits are necessary from each bidder. We show that this phenomenon already occurs with just two bidders, even when one bidder is single-dimensional, and even when the other bidder is barely multi-dimensional. More specifically, the multi-dimensional bidder is inter-dimensional from the FedEx setting with just two days [FGKK16].
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