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Improving the Efficiency of Course Bidding at Business Schools: Field and Laboratory Studies

Marketing Science, Vol. 27, pp. 262-282, March/April 2008

48 Pages Posted: 26 Oct 2008  

Aradhna Krishna

University of Michigan, Stephen M. Ross School of Business

M. Utku Ünver

Boston College - Department of Economics

Date Written: March 14, 2007

Abstract

Registrars' offices at most universities face the daunting task of allocating course seats to students. Since demand exceeds supply for many courses, course allocation needs to be done equitably and efficiently. Many schools use bidding systems where student bids are used both to infer preferences over courses and to determine student priorities for courses. However, this dual role of bids can result in course allocations not being market outcomes and unnecessary efficiency loss, which can potentially be avoided with the use of an appropriate market mechanism.

We report the result of field and laboratory studies that compare a typical course bidding mechanism with the alternate Gale-Shapley Pareto-dominant market mechanism. Results from the field study (conducted at the Ross School of Business, University of Michigan) suggest that using the latter could vastly improve efficiency of course allocation systems while facilitating market outcomes. Laboratory experiments with greater design control confirm the superior efficiency of the Gale-Shapley mechanism. The paper tests theory which has important practical implications since it has the potential to affect the learning experience of very large numbers of students enrolled in educational institutions.

Suggested Citation

Krishna, Aradhna and Ünver, M. Utku, Improving the Efficiency of Course Bidding at Business Schools: Field and Laboratory Studies (March 14, 2007). Marketing Science, Vol. 27, pp. 262-282, March/April 2008. Available at SSRN: https://ssrn.com/abstract=1289763

Aradhna Krishna

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

Utku Unver (Contact Author)

Boston College - Department of Economics ( email )

140 Commonwealth Ave.
Chestnut Hill, MA 02467
United States
+1 (617) 552 2217 (Phone)
+1 (617) 552 2318 (Fax)

HOME PAGE: http://www2.bc.edu/~unver

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