Tuition Exchange

Abstract:     
Abstract We introduce a new matching model to mimic inter-college tuition exchange programs for dependents of faculty to attend other colleges tuition-free. Each participating college has to avoid being a net-exporter of students. Programs use decentralized markets making it difficult to achieve balance. We show that stable equilibria discourage net-exporting colleges from exchange. We introduce two-sided top-trading-cycles (2S-TTC) mechanism that is balanced-efficient, student-strategy-proof, and respecting priority bylaws regarding dependent eligibility. Moreover, it encourages exchange, since full participation is dominant strategy for colleges. We prove 2S-TTC is the unique mechanism fulfilling these objectives and introduce new student-strategy-proof mechanisms to achieve other objectives.

Number of Pages in PDF File: 70

Keywords: Market Design, Matching Theory, Tuition Exchange, Balanced Exchange, Two-sided Matching, Two-sided Top Trading Cycles

JEL Classification: C71, C78, D71, D78

working papers series