Centralized School choice with unequal outside options

Mohammad Akbarpour, Adam Kapor, Christopher Neilson, Winnie van Dijk, Seth Zimmerman

Research output: Contribution to journalArticlepeer-review

Abstract

We study how market design choices exacerbate or mitigate pre-existing inequalities among participants. We introduce outside options in a well-known school choice model, and show that students always prefer manipulable over strategy-proof mechanisms if and only if they have an outside option. We test for the proposed relationship between outside options and manipulability in a setting where we can identify students’ outside options and observe applications under two mechanisms. Consistent with theory, students with an outside option are more likely to list popular, highly-rated schools under the Boston mechanism, and this gap disappears after switching to a Deferred Acceptance mechanism.

Original languageEnglish (US)
Article number104644
JournalJournal of Public Economics
Volume210
DOIs
StatePublished - Jun 2022

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

Keywords

  • Matching
  • Outside options
  • School Choice
  • Strategy-proof

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