Report-Dependent Utility and Strategy-Proofness

Meisner, Vincent (21. October 2021): Report-Dependent Utility and Strategy-Proofness. Collaborative Research Center Transregio 190, Discussion Paper No. 289

Abstract

Despite the truthful dominant strategy, participants in strategy-proof mechanisms submit manipulated preferences. In our model, participants dislike rejections and enjoy the confirmation from getting what they declared most desirable. Formally, the payoff from a match decreases in its position in the submitted ranking such that a strategic trade-off between preference intensity and match probability arises. This trade-o↵ can trigger the commonly observed self-selection strategies. We show that misrepresentations can persist for arbitrarily small report-dependent components. However, honesty is guaranteed to be optimal if and only if there is no conflict between the quality and feasibility of a match

• Item Type: Paper
• Keywords: Market design, matching, school choice, self-regarding preferences, strategy-proof mechanisms
• Faculties: Economics; Economics > Collaborative Research Center Transregio "Rationality and Competition"
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: D47, D78, D81, D91
• Language: English