Strategic Issues in One-to-One Matching with Externalities

We consider strategic issues in one-to-one matching with externalities. We show that no core (stable) mechanism is strategy-proof, extending an impossibility result of Roth (1982) obtained in the absence of externalities. Moreover, we show that there are no limits on successful manipulation of preferences by coalitions of men and women, in contrast with the result of Demange et al. (1987) obtained in the absence of externalities