Ran I. Shorrer

Optimal Truncation in Matching Markets

Although no stable matching mechanism can induce truth-telling as a dominant strategy for all participants (Roth, 1982), recent studies have presented conditions under which truthful reporting by all agents is close to optimal (Immorlica and Mahdian, 2005; Kojima and Pathak, 2009; Lee, 2011). Our results demonstrate that in large, uniform markets using the Men-Proposing Deferred Acceptance Algorithm, each womans best response to truthful behavior by all other agents is to truncate her list substantially. In fact, the optimal degree of truncation for such a woman goes to 100% of her list as the market size grows large. In general one-to-one markets we provide comparative statics for optimal truncation strategies: reduction in risk aversion and reduced correlation across preferences each lead agents to truncate more. So while several recent papers focused on the limits of strategic manipulation, our results serve as a reminder that without pre-conditions ensuring truthful reporting, there exists a potential for significant manipulation even in settings where agents have little information.

Strategic Behavior in a Strategy-proof Environment

A mechanism is said to be strategy-proof if no agent has an incentive to misrepresent her true preferences. This property is considered highly desirable for mechanisms that are used in real-life markets. And indeed, many of the great success stories of market design employ strategy-proof mechanisms, such as the second-price sealed-bid auction (Vickrey 1961), or Deferred Acceptance (DA, Gale and Shapley 1962; Dubins and Freedman 1981; Roth 1982). Specifically, in school-choice settings, the appeal of strategy-proof mechanisms is one of the main reasons many school districts choose the applicant-proposing version of DA over pre-existing mechanisms. At the core of the attractiveness of these mechanisms is the assumption that agents report their preferences truthfully in strategy-proof environments. We present direct field evidence of preference misrepresentation by applicants under the applicant-proposing DA. Our study is based on the recently redesigned admission process in Israel for graduate studies in psychology (MA or direct PhD track), where several participating institutions offer positions in the same study track, but under different terms. In particular, in some cases only some of the positions are funded.

The redesign of the medical intern assignment mechanism in Israel

A collaboration of medical professionals with economists and computer scientists involved in “market design” had led to the redesign of the clearinghouse assigning medical students to internships in Israel. The new mechanism presents significant efficiency gains relative to the previous one, and almost all students get a better chance of getting what they want. Continued monitoring of the new mechanism is required to verify that it is not abused, and explore whether it can be improved. Other organizations in Israel may also be able to profit from the experience that accumulates from market design, both in Israel and abroad.

'Strategic' Behavior in a Strategy-Proof Environment

We present direct field evidence of preference misrepresentation under deferred acceptance. A large fraction of highly educated participants, who had been informed about the strategy-proof nature of the mechanism in numerous ways, failed to play truthfully: they ranked a non-funded position above a funded position in the same program. This is despite being assured that rank-order lists are never made public, that funding is a positive signal of ability, and that funding comes with no strings attached. Surveys indicate that other kinds of preference misrepresentation are also prevalent. Preference misrepresentation in the field is associated with weaker applicants. A laboratory experiment shows that the same individual is much more likely to misrepresent her preferences when she expects to be ranked low relative to others. Our findings have important implications for the study and design of matching marketplaces.

Correlation in the Multiplayer Electronic Mail Game

In variants of the Electronic Mail Game (Rubinstein, 1989) where two or more players communicate via multiple channels, the multiple channels can facilitate collective action via redundancy, the sending of the same message along multiple paths or else repeatedly along the same path (Chwe, 1995 and De Jaegher, 2011). This paper offers another explanation for how multiple channels may permit collective action: parties may be able to coordinate their actions when messages’ arrivals at their destinations are sufficiently correlated events. Correlation serves to fill in information gaps that arise when players are uncertain of the source of message failure, effectively strengthening messages from one player. This asymmetry in message strength in turn permits cutoff equilibria, where players take action after receiving a minimum number of confirmations.

Solution to exchanges 10.2 puzzle: borrowing in the limit as our nerdiness goes to infinity

This is a solution to the editors puzzle from issue 10.2 of SIGecom Exchanges [Reeves 2011]. The Puzzle asks to determine a point in time such that a lump sum payment of

Making it Safe to Use Centralized Marketplaces: Dominant Individual Rationality and Applications to Market Design

S will be equivalent to a continuous stream of infinitesimal payments totaling

Redesigning the Israeli Psychology Master's Match

S, spread evenly over time. The full puzzle can be found online at: http://www.sigecom.org/exchanges/volume_10/2/puzzle.pdf.

Strategic Behavior in Unbalanced Matching Markets

Often market designers cannot force agents to join a marketplace rather than using preexisting institutions. We propose a new desideratum for marketplace design that guarantees the safety of participation: Dominant Individual Rationality (DIR). A marketplace is DIR if every pre-existing strategy is weakly dominated by some strategy within the marketplace. We study applications to the design of labor markets and the sharing economy. We also provide a general construction to achieve approximate DIR across a wide range of marketplace designs.