scholarly journals School choice with asymmetric information: Priority design and the curse of acceptance

2020 ◽  
Vol 15 (3) ◽  
pp. 1095-1133
Author(s):  
Andrew Kloosterman ◽  
Peter Troyan
Keyword(s):  
Asymmetric Information ◽  
School Choice ◽  
Choice Models ◽  
Current Debate ◽  
Interdependent Preferences ◽  
Equilibrium Strategies ◽  
Deferred Acceptance ◽  
Strategy Proof ◽  
Positive Results

We generalize standard school choice models to allow for interdependent preferences and differentially informed students. We show that, in general, the commonly used deferred acceptance mechanism is no longer strategy‐proof, the outcome is not stable, and may make less informed students worse off. We attribute these results to a curse of acceptance. However, we also show that if priorities are designed appropriately, positive results are recovered: equilibrium strategies are simple, the outcome is stable, and less informed students are protected from the curse of acceptance. Our results have implications for the current debate over priority design in school choice.

scholarly journals Beyond Truth-Telling: Preference Estimation with Centralized School Choice and College Admissions

2019 ◽  
Vol 109 (4) ◽  
pp. 1486-1529 ◽  
Author(s):  
Gabrielle Fack ◽  
Julien Grenet ◽  
Yinghua He
Keyword(s):  
School Choice ◽  
Test Scores ◽  
Real Life ◽  
Truth Telling ◽  
Student Preferences ◽  
Ex Post ◽  
Is Strategy ◽  
Deferred Acceptance ◽  
Strategy Proof ◽  
Novel Approaches

We propose novel approaches to estimating student preferences with data from matching mechanisms, especially the Gale-Shapley deferred acceptance. Even if the mechanism is strategy-proof, assuming that students truthfully rank schools in applications may be restrictive. We show that when students are ranked strictly by some ex ante known priority index (e.g., test scores), stability is a plausible and weaker assumption, implying that every student is matched with her favorite school/college among those she qualifies for ex post. The methods are illustrated in simulations and applied to school choice in Paris. We discuss when each approach is more appropriate in real-life settings. (JEL D11, D12, D82, I23)

scholarly journals Heterogeneous Beliefs and School Choice Mechanisms

2020 ◽  
Vol 110 (5) ◽  
pp. 1274-1315 ◽  
Author(s):  
Adam J. Kapor ◽  
Christopher A. Neilson ◽  
Seth D. Zimmerman
Keyword(s):  
School Choice ◽  
Rational Expectations ◽  
Choice Behavior ◽  
Heterogeneous Beliefs ◽  
Welfare Costs ◽  
Subjective Beliefs ◽  
Opposite Conclusion ◽  
Deferred Acceptance Algorithm ◽  
Deferred Acceptance ◽  
Strategy Proof

This paper studies how welfare outcomes in centralized school choice depend on the assignment mechanism when participants are not fully informed. Using a survey of school choice participants in a strategic setting, we show that beliefs about admissions chances differ from rational expectations values and predict choice behavior. To quantify the welfare costs of belief errors, we estimate a model of school choice that incorporates subjective beliefs. We evaluate the equilibrium effects of switching to a strategy-proof deferred acceptance algorithm, and of improving households’ belief accuracy. We find that a switch to truthful reporting in the DA mechanism offers welfare improvements over the baseline given the belief errors we observe in the data, but that an analyst who assumed families had accurate beliefs would have reached the opposite conclusion. (JEL D83, H75, I21, I28)

scholarly journals Controlled School Choice with Soft Bounds and Overlapping Types

2017 ◽  
Vol 58 ◽  
pp. 153-184 ◽  
Author(s):  
Ryoji Kurata ◽  
Naoto Hamada ◽  
Atsushi Iwasaki ◽  
Makoto Yokoo
Keyword(s):  
School Choice ◽  
Stable Matching ◽  
Extended Model ◽  
The Public ◽  
Distributional Constraints ◽  
Deferred Acceptance ◽  
Strategy Proof ◽  
Stability Definition ◽  
Model Computer ◽  
Straightforward Extension

School choice programs are implemented to give students/parents an opportunity to choose the public school the students attend. Controlled school choice programs need to provide choices for students/parents while maintaining distributional constraints on the composition of students, typically in terms of socioeconomic status. Previous works show that setting soft-bounds, which flexibly change the priorities of students based on their types, is more appropriate than setting hard-bounds, which strictly limit the number of accepted students for each type. We consider a case where soft-bounds are imposed and one student can belong to multiple types, e.g., “financially-distressed” and “minority” types. We first show that when we apply a model that is a straightforward extension of an existing model for disjoint types, there is a chance that no stable matching exists. Thus we propose an alternative model and an alternative stability definition, where a school has reserved seats for each type. We show that a stable matching is guaranteed to exist in this model and develop a mechanism called Deferred Acceptance for Overlapping Types (DA-OT). The DA-OT mechanism is strategy-proof and obtains the student-optimal matching within all stable matchings. Furthermore, we introduce an extended model that can handle both type-specific ceilings and floors and propose a extended mechanism DA-OT* to handle the extended model. Computer simulation results illustrate that DA-OT outperforms an artificial cap mechanism where we set a hard-bound for each type in each school. DA-OT* can achieve stability in the extended model without sacrificing students’ welfare.

scholarly journals Transfers in Cash and In-Kind: Theory Meets the Data

2008 ◽  
Vol 46 (2) ◽  
pp. 333-383 ◽  
Author(s):  
Janet Currie ◽  
Firouz Gahvari
Keyword(s):  
Political Economy ◽  
Asymmetric Information ◽  
Empirical Evidence ◽  
Imperfect Information ◽  
Credit Constraints ◽  
The Other ◽  
Tax System ◽  
Transfer Programs ◽  
Interdependent Preferences

We review theoretical explanations for in-kind transfers in light of the limited empirical evidence. After reviewing the traditional paternalistic arguments, we consider explanations based on imperfect information and self-targeting. We then discuss the large literature on in-kind programs as a way of improving the efficiency of the tax system and a range of other possible explanations, including the “Samaritan's Dilemma,” pecuniary effects, credit constraints, asymmetric information amongst agents, and political economy considerations. Our reading of the evidence suggests that paternalism and interdependent preferences are leading overall explanations for the existence of in-kind transfer programs but that some of the other arguments may apply to specific cases. Political economy considerations must also be part of the story.

scholarly journals Research Preregistration in Political Science: The Case, Counterarguments, and a Response to Critiques

2015 ◽  
Vol 48 (03) ◽  
pp. 425-429 ◽  
Author(s):  
James E. Monogan
Keyword(s):  
Political Science ◽  
Publication Bias ◽  
Research Design ◽  
Historical Data ◽  
Field Research ◽  
Outcome Data ◽  
Data Exploration ◽  
Current Debate ◽  
True Positive ◽  
Positive Results

ABSTRACTThis article describes the current debate on the practice of preregistration in political science—that is, publicly releasing a research design before observing outcome data. The case in favor of preregistration maintains that it can restrain four potential causes of publication bias, clearly distinguish deductive and inductive studies, add transparency regarding a researcher’s motivation, and liberate researchers who may be pressured to find specific results. Concerns about preregistration maintain that it is less suitable for the study of historical data, could reduce data exploration, may not allow for contextual problems that emerge in field research, and may increase the difficulty of finding true positive results. This article makes the case that these concerns can be addressed in preregistered studies, and it offers advice to those who would like to pursue study registration in their own work.

The Limits of Incentives in Economic Matching Procedures

2020 ◽  
Author(s):  
Avinatan Hassidim ◽  
Assaf Romm ◽  
Ran I. Shorrer
Keyword(s):  
Private Information ◽  
Graduate Programs ◽  
Revenue Maximization ◽  
Matching Markets ◽  
Positive Signal ◽  
Best Interest ◽  
High Stakes ◽  
Field Evidence ◽  
Deferred Acceptance ◽  
Strategy Proof

Organizations often require agents’ private information to achieve critical goals such as efficiency or revenue maximization, but frequently it is not in the agents’ best interest to reveal this information. Strategy-proof mechanisms give agents incentives to truthfully report their private information. In the context of matching markets, they eliminate agents’ incentives to misrepresent their preferences. We present direct field evidence of preference misrepresentation under the strategy-proof deferred acceptance in a high-stakes matching environment. We show that applicants to graduate programs in psychology in Israel often report that they prefer to avoid receiving funding, even though the mechanism preserves privacy and funding comes with no strings attached and constitutes a positive signal of ability. Surveys indicate that other kinds of preference misrepresentation are also prevalent. Preference misrepresentation in the field is associated with weaker applicants. Our findings have important implications for practitioners designing matching procedures and for researchers who study them. This paper was accepted by Axel Ockenfels, decision analysis.

scholarly journals Strategy-proof school choice mechanisms with minimum quotas and initial endowments

2017 ◽  
Vol 249 ◽  
pp. 47-71 ◽  
Author(s):  
Naoto Hamada ◽  
Chia-Ling Hsu ◽  
Ryoji Kurata ◽  
Takamasa Suzuki ◽  
Suguru Ueda ◽  
...  
Keyword(s):  
School Choice ◽  
Strategy Proof
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