Group incentive compatibility for matching with contracts

Hatfield and Milgrom [Hatfield, John William, Milgrom, Paul R., 2005. Matching with contracts. Amer. Econ. Rev. 95, 913–935] present a unified model of matching with contracts, which includes the standard two-sided matching and some package auction models as special cases. They show that the doctor-optimal stable mechanism is strategy-proof for doctors if hospitals' preferences satisfy substitutes and the law of aggregate demand. We show that the doctor-optimal stable mechanism is group strategy-proof for doctors under these same conditions. That is, no group of doctors can make each of its members strictly better off by jointly misreporting their preferences. We derive as a corollary of this result that no individually rational allocation is preferred by all the doctors to the doctor-optimal stable allocation.