Single versus Multiple Randomization in Matching Mechanisms

André Schmelzer ()
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André Schmelzer: Max Planck Institute for Research on Collective Goods

No 2016_08, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: This paper experimentally studies an essential institutional feature of matching markets: Randomization of allocation priorities. I compare single and multiple randomization in the student assignment problem with ties. The Gale-Shapley deferred acceptance algorithm is employed after indifferences in school priorities are resolved by either random procedure. The main result is that a significant fraction of individuals prefers multiple to single randomization, although both are equivalent in expectation. Multiple randomization is perceived to be fairer. One theoretical explanation is the failure to disregard compound lotteries. These results show that random procedures are not inherently neutral with respect to preferences and fairness perceptions.

Keywords: market design; school choice; mechanism design; experiment; deferred acceptance algorithm; randomization; tie-breaking (search for similar items in EconPapers)
JEL-codes: C78 C91 D78 D81 (search for similar items in EconPapers)
Date: 2016-05, Revised 2017-03
New Economics Papers: this item is included in nep-exp, nep-gth and nep-ure
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:mpg:wpaper:2016_08

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