The (Non)-Existence of Stable Mechanisms in Incomplete Information Environments

Conference paper
Part of the Lecture Notes in Computer Science book series (LNCS, volume 9470)

Abstract

We consider two-sided matching markets, and study the incentives of agents to circumvent a centralized clearing house by signing binding contracts with one another. It is well-known that if the clearing house implements a stable match and preferences are known, then no group of agents can profitably deviate in this manner.

We ask whether this property holds even when agents have incomplete information about their own preferences or the preferences of others. We find that it does not. In particular, when agents are uncertain about the preferences of others, every mechanism is susceptible to deviations by groups of agents. When, in addition, agents are uncertain about their own preferences, every mechanism is susceptible to deviations in which a single pair of agents agrees in advance to match to each other.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Open Access This chapter is distributed under the terms of the Creative Commons Attribution Noncommercial License, which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.

Authors and Affiliations

  • Nick Arnosti
    • 1
  • Nicole Immorlica
    • 2
  • Brendan Lucier
    • 2
  1. 1.Department of Management Science and EngineeringStanford UniversityStanfordUSA
  2. 2.Microsoft ResearchCambridgeUSA

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