When Does an Additional Stage Improve Welfare in Centralized Assignment?

27 Pages Posted: 15 Aug 2018

See all articles by Battal Dogan

Battal Dogan

Department of Economics, University of Bristol

M. Bumin Yenmez

Boston College

Date Written: July 31, 2018

Abstract

We study multistage centralized assignments to allocate scarce resources based on priorities in the context of school choice. We characterize the capacity-priority profiles of schools under which an additional stage of assignment may improve student welfare when the deferred acceptance algorithm is used at each stage. If the capacity-priority profile is acyclic, then no student prefers any subgame-perfect Nash equilibrium (SPNE) outcome of the 2-stage enrollment system to the truthful equilibrium outcome of the 1-stage enrollment system. If the capacity-priority profile is not acyclic, then an SPNE outcome of the 2-stage enrollment system may Pareto dominate the truthful equilibrium outcome of the 1-stage enrollment system.

Keywords: market design, multistage assignment, school choice, deferred acceptance algorithm

Suggested Citation

Dogan, Battal and Yenmez, M. Bumin, When Does an Additional Stage Improve Welfare in Centralized Assignment? (July 31, 2018). Available at SSRN: https://ssrn.com/abstract=3223789 or http://dx.doi.org/10.2139/ssrn.3223789

Battal Dogan (Contact Author)

Department of Economics, University of Bristol ( email )

United Kingdom

M. Bumin Yenmez

Boston College ( email )

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

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