The Iterative Deferred Acceptance Mechanism

Abstract

Lately, there has been an increase in the use of sequential mechanisms, instead of the traditional direct counterparts, in college admissions in many countries, including Germany, Brazil, and China. We describe these mechanisms and identify their shortcomings in terms of incentives and outcome properties. We introduce a new mechanism, which improves upon these shortcomings. Unlike direct mechanisms, which ask students for a full preference ranking over colleges, our mechanism asks students to sequentially make choices or submit partial rankings from sets of colleges. These are used to produce a tentative allocation at each step. If at some point it is determined that a student can no longer be accepted into previous choice, then she is asked to make another choice among colleges that would tentatively accept her. Participants following the simple strategy of choosing the most-preferred college in each step is an ex-post equilibrium that yields the Student-Optimal Stable Matching.

Keywords: Market Design, Matching, Iterative Mechanisms, College Admissions

JEL Classification: C78, C92, D63, D78, D82