The redesign of the matching market for American physicians: Some engineering aspects of economic design

We report on the design of the new clearinghouse adopted by the National Re sident Matching Program, which annually fills approximately 20,000 jobs for new physicians. Because the market has complementarities between applicant s and between positions, the theory of simple matching markets does not app ly directly. However computational experiments show the theory provides goa d approximations. Furthermore, the set of stable matchings, and the opportu nities for strategic manipulation, are surprisingly small. A new kind of "c ore convergence" result explains this; that each applicant interviews only a small fraction of available positions is important. We also describe engi neering aspects of the design process. (JEL C78, B41, J44).