Premium
Truncation Strategies in Matching Markets—in Search of Advice for Participants
Author(s) -
Roth Alvin E.,
Rothblum Uriel G.
Publication year - 1999
Publication title -
econometrica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 16.7
H-Index - 199
eISSN - 1468-0262
pISSN - 0012-9682
DOI - 10.1111/1468-0262.00002
Subject(s) - scope (computer science) , preference , order (exchange) , matching (statistics) , clearing , truncation (statistics) , business , microeconomics , advice (programming) , economics , industrial organization , marketing , computer science , finance , statistics , mathematics , machine learning , programming language
We consider the strategic options facing workers in labor markets with centralized market clearing mechanisms such as those in the entry level labor markets of a number of professions. If workers do not have detailed information about the preferences of other workers and firms, the scope of potentially profitable strategic behavior is considerably reduced, although not entirely eliminated. Specifically, we demonstrate that stating preferences that reverse the true preference order of two acceptable firms is not beneficial in a low information environment, but submitting a truncation of the true preferences may be. This gives some insight into the successful operation of these market mechanisms.