School choice with vouchers
Journal of Economic Theory, 2019, vol. 179, issue C, 57-72
We introduce a novel school-choice with vouchers model. A feasibility notion is defined to incorporate the constraint that students from low-income families need a voucher to go to a private school. We then introduce a stability notion, while emphasizing that the traditional school-choice model and usual stability notion are realized as a special case of our formulation. A class of feasible, stable, and constrained efficient mechanisms is proposed. However, feasibility and stability are incompatible with strategy-proofness in the sense that no mechanism is feasible, stable, and strategy-proof at the same time, implying that any mechanism in our class is manipulable. Given the efficiency and strategic disadvantages of stability, as an alternative solution, we introduce a feasible, efficient, and strategy-proof mechanism. Lastly, we provide a comparative statics analysis.
Keywords: Voucher; School choice; Matching; Stability; Efficiency; Strategy-proofness (search for similar items in EconPapers)
JEL-codes: C72 C78 D61 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:179:y:2019:i:c:p:57-72
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