Strategic schools under the Boston mechanism revisited

Inacio Bo and C.-Philipp Heller

Discussion Papers, Research Unit: Market Behavior from WZB Berlin Social Science Center

Abstract: We show that Ergin & Sönmez's (2006) results which show that for schools it is a dominant strategy to truthfully rank the students under the Boston mechanism, and that the Nash equilibrium outcomes in undominated strategies of the induced game are stable, rely crucially on two assumptions. First, (a) that schools need to be restricted to find all students acceptable, and (b) that students cannot observe the priorities set by the schools before submitting their preferences. We show that relaxing either assumption eliminates the strategy dominance, and that Nash equilibrium outcomes in undominated strategies for the simultaneous induced game in case (a) and subgame perfect Nash equilibria in case (b) may contain unstable matchings. We also show that when able to manipulate capacities, schools may only have an incentive to do so if students submit their preferences after observing the reported capacities.

Keywords: Mechanism Design; Two-Sided Matching; Boston Mechanism; School Choice (search for similar items in EconPapers)
JEL-codes: C78 D63 D78 D82 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-gth, nep-hpe, nep-mic, nep-net and nep-ure
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Journal Article: Strategic schools under the Boston mechanism revisited (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wzbmbh:spii2016204

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