CAN PRE-ARRANGED MATCHES BE AVOIDED IN TWO-SIDED MATCHING MARKETS?
Abstract We study manipulation via pre-arranged matches in the context of centralized two-sided matching markets. We show that the solution that is used to match the hospitals and medical residents in the United States, namely the hospital-optimal stable rule, is manipulable in this way. Unfortunately this is a general problem: We show that there is no solution that is both stable and non-manipulable. Journal of Economic Literature Classification Numbers: C71, C78, D71, D78.