Games with capacity manipulation: incentives and Nash equilibria Articles uri icon

publication date

  • September 2013

start page

  • 701

end page

  • 720

issue

  • 3

volume

  • 41

International Standard Serial Number (ISSN)

  • 0176-1714

Electronic International Standard Serial Number (EISSN)

  • 1432-217X

abstract

  • Studying the interactions between preference and capacity manipulation in matching markets, we prove that acyclicity is a necessary and sufficient condition that guarantees the stability of a Nash equilibrium and the strategy-proofness of truthful capacity revelation under the hospital-optimal and intern-optimal stable rules. We then introduce generalized games of manipulation in which hospitals move first and state their capacities, and interns are subsequently assigned to hospitals using a sequential mechanism. In this setting, we first consider stable revelation mechanisms and introduce conditions guaranteeing the stability of the outcome. Next, we prove that every stable non-revelation mechanism leads to unstable allocations, unless restrictions on the preferences of the agents are introduced.