School Choice with Controlled Choice Constraints: Hard Bounds Versus Soft Bounds
University of Montreal - Département de Sciences Economiques and CIREQ
Isa Emin Hafalir
Carnegie Mellon University - David A. Tepper School of Business
M. Bumin Yenmez
Carnegie Mellon University - Tepper School of Business
Muhammed Ali Yildirim
Harvard University - Harvard Kennedy School (HKS)
November 1, 2012
Controlled choice over public schools attempts giving parents selection options while maintaining diversity of different student types. In practice, diversity constraints are often enforced by setting hard upper bounds and hard lower bounds for each student type. We demonstrate that, with hard bounds, there might not exist assignments that satisfy standard fairness and non-wastefulness properties; and only constrained non-wasteful assignments which are fair for same type students can be guaranteed to exist. We introduce the student exchange algorithm with hard bounds (SEAHB) that finds a Pareto optimal assignment among such assignments. To achieve fair (across all types) and non-wasteful assignments, we propose the control constraints to be interpreted as soft bounds- flexible limits that regulate school priorities dynamically. In this setting, the deferred acceptance algorithm with soft bounds (DAASB) finds an assignment that is Pareto optimal among fair assignments while eliciting true preferences. Thus, we demonstrate DAASB has clear benefits over SEAHB.
Number of Pages in PDF File: 42
Keywords: School Choice, Affirmative Action
JEL Classification: C78, D61, D78, I20working papers series
Date posted: November 27, 2011 ; Last revised: February 22, 2013
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