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The Skipping-down strategy and stability in school choice problems with affirmative action: Theory and experiment

Toshiji Kawagoe, Taisuke Matsubae and Hirokazu Takizawa

Games and Economic Behavior, 2018, vol. 109, issue C, 212-239

Abstract: This paper presents a theoretical and experimental study of affirmative action policies in school choice problems focusing on the minority reserve mechanism, or DA-Reserve, proposed by Hafalir et al. (2013) and the majority quota mechanism, or DA-Quota, proposed by Abdulkadiroglu and Sönmez (2003), Kojima (2012) and Matsubae (2011). An evaluation of the performance of these mechanisms showed that, (1) while truth-telling is a dominant strategy in both mechanisms, the rate of its occurrence was less than 60%; (2) the average payoff was significantly higher with DA-Reserve than with DA-Quota, as theoretically predicted; (3) surprisingly, the proportion of students exhibiting justified envy was higher with DA-Reserve than with DA-Quota; and (4) a systematic pattern of deviation from the dominant strategy (referred to as skipping-down) was observed, and it was theoretically proven that this constituted Nash equilibrium with DA-Quota in some environments but not with DA-Reserve. More generally, the set of stable matchings was found to be larger with DA-Quota than with DA-Reserve, which explains the matching instability observed with the latter.

Keywords: School choice; Truth-telling; Affirmative action; Market design; Experiment (search for similar items in EconPapers)
JEL-codes: C78 C92 D78 I20 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:gamebe:v:109:y:2018:i:c:p:212-239