Characterizations of the Cumulative Offer Process

15 Pages Posted: 2 Sep 2015

Date Written: August 31, 2015

Abstract

In the matching with contracts setting, we provide two new axiomatic characterizations of the "cumulative offer process" (COP) in the domain of hospital choices satisfying "unilateral substitutes" and "irrelevance of rejected contracts." We say that a mechanism is truncation-proof if no doctor can ever benefit from truncating his preferences. Our first result shows that the COP is the unique stable and truncation-proof mechanism. Next, we say that a mechanism is invariant to lower tail preferences change if any doctor's assignment does not depend on his preferences over worse contracts. Our second characterization shows that a mechanism is stable and invariant to lower tail preferences change if and only if it is the COP.

Keywords: the cumulative offer process, truncation, invariance, characterization, unilateral substitutes, irrelevance of rejected contracts.

JEL Classification: C78, D44, D47.

Suggested Citation

Afacan, Mustafa Oguz, Characterizations of the Cumulative Offer Process (August 31, 2015). Available at SSRN: https://ssrn.com/abstract=2653751 or http://dx.doi.org/10.2139/ssrn.2653751

Mustafa Oguz Afacan (Contact Author)

Sabanci University ( email )

Faculty of Art and Social Sciences
Orhanli Tuzla
İstanbul, 34956
Turkey

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