An improved 2-agent kidney exchange mechanism

We study a mechanism design version of matching computation in graphs that models the game played by hospitals participating in pairwise kidney exchange programs. We present a new randomized matching mechanism for two agents which is truthful in expectation and has an approximation ratio of 3/2 to the maximum cardinality matching. This is an improvement over a recent upper bound of 2 (Ashlagi et al., 2010 [2]) and, furthermore, our mechanism beats for the first time the lower bound on the approximation ratio of deterministic truthful mechanisms. We complement our positive result with new lower bounds. Among other statements, we prove that the weaker incentive compatibility property of truthfulness in expectation in our mechanism is necessary; universally truthful mechanisms that have an inclusion-maximality property have an approximation ratio of at least 2.