Strategy-Proofness Made Simpler

Management Science, vol. 71, pp. 7560–7578

Abstract

There is evidence that many people do not report their types truthfully in strategy-proof mechanisms. One of the leading explanations is mechanism complexity. We propose a novel way of describing any strategy-proof mechanism with the aim to reduce the ensuing cognitive load on players and, hence, to increase truthful reporting. The description highlights that a player is guaranteed to obtain a most preferred feasible allocation based on her reported type and that feasibility depends only on the other players’ reports. Optimality of truthful reporting should therefore become more “apparent.” We experimentally test this prediction using the top trading cycles mechanism for matching applicants to positions. The proposed description increases truth-telling. This increase positively interacts with subject numeracy. This paper was accepted by Dorothea Kübler, behavioral economics and decision analysis. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.02531 .

Authors 2

1. Peter Katuščák Aachen School of Business and Economics

   RWTH Aachen University

   Affiliation as printed

   School of Business and Economics, RWTH Aachen University, 52064 Aachen, Germany

2. Thomas Kittsteiner corresponding Aachen School of Business and Economics

   RWTH Aachen University

   Affiliation as printed

   School of Business and Economics, RWTH Aachen University, 52064 Aachen, Germany