Consistent Pareto Improvement over the Student Optimal Stable Mechanism

14 Pages Posted: 25 Jul 2017 Last revised: 17 Aug 2017

Battal Dogan

University of Lausanne - Faculty of Business and Economics (HEC)

M. Bumin Yenmez

Boston College

Date Written: August 7, 2017

Abstract

We show that there is no consistent Pareto improvement over any stable mechanism. To overcome this impossibility, we introduce the following weak consistency requirement: Whenever a set of students, each of whom is assigned to a school that is under-demanded at the student-optimal stable matching, are removed with their assigned seats, then the assignments of the remaining students should not change. We show that EADA (Kesten, 2010) is the unique mechanism that is weakly consistent and Pareto improves over the student-optimal stable mechanism.

Keywords: Market Design, School Choice, Consistency, Weak Consistency, EADA

JEL Classification: C78, D47, D71, D78

Suggested Citation

Dogan, Battal and Yenmez, M. Bumin, Consistent Pareto Improvement over the Student Optimal Stable Mechanism (August 7, 2017). Available at SSRN: https://ssrn.com/abstract=3007223 or http://dx.doi.org/10.2139/ssrn.3007223

Battal Dogan (Contact Author)

University of Lausanne - Faculty of Business and Economics (HEC) ( email )

1015
Lausanne
Switzerland

M. Bumin Yenmez

Boston College ( email )

140 Commonwealth Ave.
Maloney Hall 327
Chestnut Hill, MA 02467
United States

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