Undergraduate Course Allocation through Competitive Markets

Abstract

We consider a many-to-many matching problem with a priority structure such as the one in undergraduate course allocation. We develop a deterministic market mechanism based on the approximate competitive equilibrium from equal incomes that allocates courses to students based on student preferences and respects course priorities. The novel mechanism has desirable theoretical properties in terms of stability, efficiency, fairness, and strategy-proofness. In simulated environments, its outcomes increase student mean utility and allocation fairness as compared to the outcomes of the celebrated deferred acceptance mechanisms with single and multiple tie-breakings, as well as to the outcomes of the widely used random serial dictatorship with set-asides.

Keywords: market design, matching, many-to-many assignment, deterministic assignment, course allocation, approximate competitive equilibrium, random serial dictatorship, set-asides

JEL Classification: D47, D63, D82, C63, C78, I21