Welfare and Incentives in Partitioned School Choice Markets
18 Pages Posted: 23 Feb 2018
Date Written: February 15, 2018
Divided enrollment systems cause school assignments to be unfair and wasteful. Iterative version of the student-optimal stable mechanism (I-SOSM), proposed by Manjunath and Turhan (2016), achieves individually rational and fair assignments in such partitioned school choice markets for any number of iteration. It also reaches a non-wasteful matching when iterated sufficiently many times. This paper examines the effects of partition structure of schools on students' welfare and incentives they face under I-SOSM. I find that when school partition gets coarser students' welfare weakly increases under I-SOSM for any number of iteration. I also show that under coarser school partitions I-SOSM becomes weakly less manipulable for students according to a criteria defined by Pathak and Sönmez (2013). These results suggest that when full integration is not possible keeping school partition as coarse as possible benefits students with respect to their welfare and incentives they face if stability is a concern for policymakers.
Keywords: divided enrollment, school partitions, school choice, fairness, non-wastefulness, manipulation
JEL Classification: C78, D47, D63
Suggested Citation: Suggested Citation