Abstract: This paper, using matching game theoretic methods, studies the algorithm design and the fair incentive mechanism in Chinese college admissions market. Based on the admissions procedure, we design the Chinese college admissions algorithm, which we proved is feasible. We prove that every stable allocation can be produced by a Nash equilibrium, but not vice versa. We demonstrate the relationship between fairness and stability, and prove that stability implies fairness but not vice versa. Then we construct a (Gale and Shapley) deferred-acceptance algorithm in our market and show that it is both stable and strategy-proof. Therefore, it is a fair incentive mechanism.

Key words: matching game, Chinese college admissions market, Chinese college admissions algorithm, deferred-acceptance algorithm, incentive mechanism