Saturday, July 6, 2019

Market design in the May Games and Economic Behavior

I've just gotten around to looking at the May issue of Games and Economic Behavior, and it contains several exciting market design papers.

Chinese college admissions and school choice reforms: An experimental study

Pages 83-100
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Since 2001, many Chinese provinces have transitioned from a “sequential” to a “parallel” school choice or college admissions mechanism. Inspired by this natural experiment, we evaluate the sequential (immediate acceptance, IA), parallel (PA), and deferred acceptance (DA) mechanisms in the laboratory. We find that participants are most likely to reveal their preferences truthfully under DA, followed by PA and then DA. While stability comparisons also follow the same order, efficiency comparisons vary across environments. Regardless of the metrics, the performance of PA is robustly sandwiched between IA and DA. Furthermore, 53% of our subjects adopt an insurance strategy under PA, making them at least as well off as what they could guarantee themselves under IA. These results help explain the recent reforms in Chinese school choice and college admissions.

Assigning more students to their top choices: A comparison of tie-breaking rules

Pages 167-187
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School districts that implement stable matchings face various decisions that affect students' assignments to schools. We study the properties of the rank distribution of students with random preferences when schools use different tie-breaking rules to rank equivalent students. Under a single tie-breaking rule, where all schools use the same ranking, a constant fraction of students are assigned to one of their top choices. In contrast, under a multiple tie-breaking rule, where each school independently ranks students, a vanishing fraction of students are matched with one of their top choices. However, if students are allowed to submit only relatively short preference lists under a multiple tie-breaking rule, a constant fraction of students will be matched with one of their top choices, while only a “small” fraction of students will remain unmatched.

Matching with waiting times: The German entry-level labor market for lawyers

Pages 289-313
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We study the allocation of German lawyers to regional courts for legal trainee-ships. Because of excess demand in some regions lawyers often have to wait before being allocated. The currently used “Berlin” mechanism is not weakly Pareto efficient, does not eliminate justified envy and does not respect improvements. We introduce a mechanism based on the matching with contracts literature, using waiting time as the contractual term. The resulting mechanism is strategy-proof, weakly Pareto efficient, eliminates justified envy and respects improvements. We extend our proposed mechanism to allow for a more flexible allocation of positions over time.

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