Ex Ante Efficiency in School Choice Mechanisms PDF Download

Author: Clayton Featherstone
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 36

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Book Description
Criteria for evaluating school choice mechanisms are first, whether truth-telling is sometimes punished and second, how efficient the match is. With common knowledge preferences, Deferred Acceptance (DA) dominates the Boston mechanism by the first criterion and is ambiguously ranked by the second. Our laboratory experiments confirm this. A new ex ante perspective, where preferences are private information, introduces new efficiency costs borne by strategy-proof mechanisms, like DA. In a symmetric environment, truth-telling can be an equilibrium under Boston, and Boston can first-order stochastically dominate DA in terms of efficiency, both in theory and in the laboratory.

Author: Clayton Ray Featherstone
Publisher: Stanford University
ISBN:
Category :
Languages : en
Pages : 149

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Book Description
In this dissertation, we will study three market-based institutions and the incentives that govern them. The first institution is that of centralized school choice, which has become increasingly important over the past decade. Students submit ordinal rankings over schools and a central mechanism uses those rankings to assign students. We study an important mechanism that is seen in the field, the Boston mechanism, and another mechanism with nice theoretical properties, the Deferred acceptance mechanism (DA), that has been adopted in several large school districts. One of the biggest reasons that DA is theoretically nice is that it makes truthful preference revelation a dominant strategy for the students. In a lab experiment, we show that students fail to truthfully reveal their rankings over schools when it is profitable to do so (under Boston), but tell the truth when it is not (under DA). In this sense, the experiment confirms the intuition that designers of school choice mechanisms should be worried about strategic manipulation of preference reports. We also, however, look at a different preference environment where truth-telling is a Bayes- Nash equilibrium under Boston and a dominant strategy equilibrium under DA. What's more, under this environment, given truthful revelation, Boston yields outcomes that stochastically dominant those of DA from the interim perspective that considers others' preferences unknown. In this environment, we see truth-telling rates that are not significantly different, which means that we might be able to implement better outcomes if we look to mechanisms that implement truth-telling as a Bayes-Nash equilibrium, instead of as a dominant strategy. Next, we look at two-sided labor matches, such as the one used by the National Residency Matching Program (NRMP) to match newly-minted doctors to residency programs. Again, we see two major types of mechanisms -- priority mechanisms that try to implement potential matches in a particular order, and Deferred Acceptance mechanisms, which rely on the Gale-Shapley algorithm. Relative to truthful preference revelation, DA is ex post stable, while priority mechanisms are not. Ex post stability intuitively prevents unraveling. In equilibrium, though, we do not expect truthful preference revelation, and in fact, this leads to instability in the equilibria of both mechanisms. Still, in the field, we see that priority mechanisms tend to unravel, while DA mechanisms do not. This is a puzzle which can be resolved if agents truthfully reveal under DA, in spite of the fact that they could profit by deviating. In the lab, we show that this is exactly what we see, which provides a complementary explanation for the success of DA to the core-convergence-based explanations. Finally, we look at long-distance trade without enforcement. When we think of pre-modern trade, a major problem was the worry that agents carrying goods might abscond with those goods instead of carrying them to their intended destinations. Explanations in the literature have tended to rely on models of reputation. These models, in turn, rely on the theory of infinitely repeated games. This is usually justified via the thought that traders formed some sort of tightly knit community or had some sort of dynastic continuation. We look at the question of finite trade. Although the conventional wisdom is that finite trade would unravel from the last period, we show a mechanism by which this does not happen. Beyond merely making a technical point, we think this model of finite trade provides a good model with which to think about impersonal trade.

Author: Nir Vulkan
Publisher: OUP Oxford
ISBN: 0191668435
Category : Business & Economics
Languages : en
Pages : 706

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Book Description
Economists often look at markets as given, and try to make predictions about who will do what and what will happen in these markets. Market design, by contrast, does not take markets as given; instead, it combines insights from economic and game theory together with common sense and lessons learned from empirical work and experimental analysis to aid in the design and implementation of actual markets In recent years the field has grown dramatically, partially because of the successful wave of spectrum auctions in the US and in Europe, which have been designed by a number of prominent economists, and partially because of the increase use of the Internet as the platform over which markets are designed and run There is now a large number of applications and a growing theoretical literature. The Handbook of Market Design brings together the latest research from leading experts to provide a comprehensive description of applied market design over the last two decades In particular, it surveys matching markets: environments where there is a need to match large two-sided populations to one another, such as medical residents and hospitals, law clerks and judges, or patients and kidney donors It also examines a number of applications related to electronic markets, e-commerce, and the effect of the Internet on competition between exchanges.

Author: Caroline M. Hoxby
Publisher: University of Chicago Press
ISBN: 0226355349
Category : Education
Languages : en
Pages : 367

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Book Description
Now that the U.S. Supreme Court has declared school voucher programs constitutional, the many unanswered questions concerning the potential effects of school choice will become especially pressing. Contributors to this volume draw on state-of-the-art economic methods to answer some of these questions, investigating the ways in which school choice affects a wide range of issues. Combining the results of empirical research with analyses of the basic economic forces underlying local education markets, The Economics of School Choice presents evidence concerning the impact of school choice on student achievement, school productivity, teachers, and special education. It also tackles difficult questions such as whether school choice affects where people decide to live and how choice can be integrated into a system of school financing that gives children from different backgrounds equal access to resources. Contributors discuss the latest findings on Florida's school choice program as well as voucher programs and charter schools in several other states. The resulting volume not only reveals the promise of school choice, but examines its pitfalls as well, showing how programs can be designed that exploit the idea's potential but avoid its worst effects. With school choice programs gradually becoming both more possible and more popular, this book stands out as an essential exploration of the effects such programs will have, and a necessary resource for anyone interested in the idea of school choice.

Author: Martin Bichler
Publisher: Cambridge University Press
ISBN: 1316800245
Category : Computers
Languages : en
Pages : 297

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Book Description
The digital economy led to many new services where supply is matched with demand for various types of goods and services. More and more people and organizations are now in a position to design market rules that are being implemented in software. The design of markets is challenging as it needs to consider strategic behavior of market participants, psychological factors, and computational problems in order to implement the objectives of a designer. Market models in economics have not lost their importance, but the recent years have led to many new insights and principles for the design of markets, which are beyond traditional economic theory. This book introduces the fundamentals of market design, an engineering field concerned with the design of real-world markets.

Author: Atila Abdulkadiroğlu
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Author: Eric Samuel Mayefsky
Publisher: Stanford University
ISBN:
Category :
Languages : en
Pages : 106

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Book Description
I explore fundamental behavioral aspects of several market design environments in a variety of projects using both theoretical models and laboratory experiments. I show that human tendencies can drastically shift potential outcomes away from those which would result if individuals were fully 'rational' and unbiased in decision problems similar to those found frequently in the field. I explore two common classes of centralized matching mechanisms--Deferred Acceptance and Priority--which have wildly different success rates in practice despite both being open to manipulation by agents who have incomplete information about the other participants in the match. For this reason, theory predicts both mechanisms in equilibrium will yield match outcomes which are unstable, meaning some agents will desire to renegotiate with one another after receiving their match assignments, and thus reduce participants' confidence in using the match. I provide laboratory evidence that out-of-equilibrium truth telling by agents is substantially more frequent in the Deferred Acceptance environment and thus Deferred Acceptance matches will generally be more stable in practice than matches using a Priority mechanism. This may explain why Deferred Acceptance mechanisms appear to be more viable in the field. I also explore two different models of decentralized two-sided matching environments where establishing scarce signaling methods can improve market outcomes. In a laboratory experiment, I show that allowing potential receiving job offers to send a single signal to their favorite potential employer before job offers are made increases overall match rates in the market, but is potentially damaging to the firms making offers when compared to the market without such a signal. Then, in a theoretical model where pre-offer communication takes the form of an interview process where workers have natural limits on the number of interviews in which they can participate, I show that in many cases firms can benefit themselves and the market as a whole by voluntarily restricting the number of interviews they offer to participate in. While not traditionally thought of as market design problems, voting mechanisms are fundamentally goods allocation problems as well and have many of the same issues as traditional markets do. I explore the effects of voter bias on outcomes in an otherwise standard voting model and find that even slight external pressure on individuals in a committee tasked with coming to a collective decision can destroy the ability of that committee to arrive at the correct result, even when individuals have good information about the best decision to make. Furthermore, the quality of the decision made by such a committee can actually degrade as the committee size increases, in contrast with the canonical Condorcet Jury Theorem which predicts that a committee's ability to choose the right outcome increases quickly as more members are added.

Author: Sanmay Das
Publisher: Springer Science & Business Media
ISBN: 3642038212
Category : Computers
Languages : en
Pages : 116

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Book Description
These proceedings present the technical contributions to the First Conference on A- tions, Market Mechanisms, and Their Applications (AMMA), held May 8-9, 2009 in Boston, Massachusetts, USA. The conference was devoted to issues that arise in all stages of deploying a market mechanism to solve a problem, including theoretical and empirical examinations. In addition to more traditional academic papers, the conf- ence placed emphasis on experiences from the real world, including case studies and new applications. The main goal of AMMA was to explore the synergy required for good mechanism design. This includes an understanding of the economic and game-theoretic issues, the ability to design protocols and algorithms for realizing desired outcomes, and the knowledge of specific institutional details that are important in practical applications. We were lucky enough to attract papers and talks from economists and computer scientists, theorists and empiricists, academics and practitioners. The program, as reflected in these proceedings, ranged from fundamental theory on auctions and m- kets to empirical design and analysis of matching mechanisms, peer-to-peer-systems, and prediction markets.

Author: Jess Benhabib
Publisher: Newnes
ISBN: 0444537139
Category : Business & Economics
Languages : en
Pages : 1509

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Book Description
How can economists define and measure social preferences and interactions? Through the use of new economic data and tools, our contributors survey an array of social interactions and decisions that typify homo economicus. Identifying economic strains in activities such as learning, group formation, discrimination, and the creation of peer dynamics, they demonstrate how they tease out social preferences from the influences of culture, familial beliefs, religion, and other forces. Advances our understanding about quantifying social interactions and the effects of culture Summarizes research on theoretical and applied economic analyses of social preferences Explores the recent willingness among economists to consider new arguments in the utility function

Author: Ulle Endriss
Publisher: Lulu.com
ISBN: 1326912097
Category : Computers
Languages : en
Pages : 424

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Book Description
Computational social choice is concerned with the design and analysis of methods for collective decision making. It is a research area that is located at the interface of computer science and economics. The central question studied in computational social choice is that of how best to aggregate the individual points of view of several agents, so as to arrive at a reasonable compromise. Examples include tallying the votes cast in an election, aggregating the professional opinions of several experts, and finding a fair manner of dividing a set of resources amongst the members of a group -- Back cover.