Non-standard Choice in Matching Markets

We explore the possibility of designing matching mechanisms that can accommodate non-standard choice behavior. We pin down the necessary and sufficient conditions on participants’ choice behavior for the existence of stable and incentive compatible mechanisms. Our results imply that well-functioning matching markets can be designed to adequately accommodate a plethora of choice behaviors, including the standard behavior that is consistent with preference maximization. To illustrate the significance of our results in practice, we show that a simple modification in a commonly used matching mechanism enables it to accommodate non-standard choice behavior.

Caspari, Gian und Manshu Khanna (2022), Non-standard Choice in Matching Markets, ZEW Discussion Paper Nr. 22-054, Mannheim.