Iterative versus Standard Deferred Acceptance: Experimental Evidence
38 Pages Posted: 29 Oct 2016 Last revised: 11 Nov 2016
Date Written: November 10, 2016
We run laboratory experiments where subjects are matched to colleges, and colleges are not strategic agents. We test the Gale-Shapley Deferred Acceptance (DA) mechanism versus the Iterative Deferred Acceptance Mechanism (IDAM), a matching mechanism based on a new family of procedures being used in the field, in which information about tentative allocations is provided while students make choices. We consider two variations of IDAM: one in which students are informed at each step of the tentative cutoff values for acceptance at each school (IDAM) and one in which they are only informed about whether they are tentatively accepted or not (IDAM-NC). A significantly higher proportion of stable outcomes is reached both under IDAM and IDAM-NC than under DA. The difference can be explained by a higher proportion of subjects following an equilibrium strategy akin to truthful behavior under IDAM and IDAM-NC than truthful behavior itself under DA. Moreover, the provision of intermediate cutoff values in IDAM leads to higher rates of equilibrium behavior than in IDAM-NC. Our findings provide substantial support for the rising practice of using sequential mechanisms in centralized college admissions in practice.
Keywords: Market Design, Matching, Iterative Mechanisms, College Admissions, Experiments
JEL Classification: C78, C92, D63, D78, D82
Suggested Citation: Suggested Citation