We report on the design of the new clearinghouse adopted by the National Resident Matching Program, which annually fills approximately 20,000 jobs for new physicians. Because the market has complementarities between applicants and between positions, the theory of simple matching markets does not apply directly. However, computational experiments show the theory provides good approximations. Furthermore, the set of stable matchings, and the opportunities for strategic manipulation, are surprisingly small. A new kind of "core convergence" result explains this; that each applicant interviews only a small fraction of available positions is important. We also describe engineering aspects of the design process.

We consider the strategic options facing workers in labor markets with centralized market clearing mechanisms such as those in the entry level labor markets of a number of professions. If workers do not have detailed information about the preferences of other workers and firms, the scope of potentially profitable strategic behavior is considerably reduced, although not entirely eliminated. Specifically, we demonstrate that stating preferences that reverse the true preference order of two acceptable firms is not beneficial in a low information environment, but submitting a truncation of the true preferences may be. This gives some insight into the successful operation of these market mechanisms.