Parallel Markets in School Choice

39 Pages Posted: 16 Jun 2021

See all articles by Mustafa Oguz Afacan

Mustafa Oguz Afacan

Sabanci University

Piotr Evdokimov

National Research University Higher School of Economics

Rustamdjan Hakimov

WZB Berlin Social Science Center; University of Lausanne

Bertan Turhan

Iowa State University

Date Written: June 13, 2021

Abstract

When applying to schools, students often submit applications to distinct school systems that operate independently, which leads to waste and distortions of stability due to miscoordination. To alleviate this issue, Manjunath and Turhan (2016) introduce the Iterative Deferred Acceptance mechanism (IDA); however, this mechanism is not strategy-proof. We design an experiment to compare the performance of this mechanism under parallel markets (DecDA2) to the classic Deferred Acceptance mechanism with both divided (DecDA) and unified markets (DA). Consistent with the theory, we find that both stability and efficiency are highest under DA, intermediate under DecDA2, and lowest under DecDA. We observe that some subjects use strategic reporting when predicted, leading to improved efficiency for all participants of the market. Our findings cast doubt on whether strategy-proofness should be perceived as a universal constraint to market mechanisms.

Keywords: Matching markets, deferred acceptance, information acquisition, game the- ory, lab experiment

JEL Classification: C92, D47

Suggested Citation

Afacan, Mustafa Oguz and Evdokimov, Piotr and Hakimov, Rustamdjan and Turhan, Bertan, Parallel Markets in School Choice (June 13, 2021). Available at SSRN: https://ssrn.com/abstract=3866583 or http://dx.doi.org/10.2139/ssrn.3866583

Mustafa Oguz Afacan

Sabanci University ( email )

Faculty of Art and Social Sciences
Orhanli Tuzla
─░stanbul, 34956
Turkey

Piotr Evdokimov

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Rustamdjan Hakimov

WZB Berlin Social Science Center ( email )

Reichpietschufer 50
D-10785 Berlin, 10785
Germany

University of Lausanne ( email )

Quartier Chambronne
Lausanne, 1016
Switzerland

Bertan Turhan (Contact Author)

Iowa State University ( email )

260 Heady Hall
Ames, IA 50011
United States

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