Promoting School Competition Through School Choice: A Market Design Approach

John William Hatfield, Fuhito Kojima and Yusuke Narita ()
Additional contact information
John William Hatfield: Graduate School of Business, Stanford University
Fuhito Kojima: Department of Economics, Stanford University

No 2011-018, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: We study the effect of different school choice mechanisms on schools' incentives for quality improvement. To do so, we introduce the following criterion: A mechanism respects improvements of school quality if each school becomes weakly better off whenever that school becomes more preferred by students. We first show that no stable mechanism, or mechanism that is Pareto efficient for students (such as the Boston and top trading cycles mechanisms), respects improvements of school quality. Nevertheless, for large school districts, we demonstrate that any stable mechanism approximately respects improvements of school quality; by contrast, the Boston and top trading cycles mechanisms fail to do so. Thus a stable mechanism may provide better incentives for schools to improve themselves than the Boston and top trading cycles mechanisms.

Keywords: Matching; School Choice; School Competition; Stability; Efficiency (search for similar items in EconPapers)
JEL-codes: C78 D78 H75 I21 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-edu, nep-gth, nep-lab and nep-ure
Note: MIP
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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http://humcap.uchicago.edu/RePEc/hka/wpaper/Hatfie ... hool-competition.pdf First version, September 27, 2011 (application/pdf)

Related works:
Working Paper: Promoting School Competition Through School Choice: A Market Design Approach (2012)
Working Paper: Promoting School Competition Through School Choice: A Market Design Approach (2012)
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