School Choice with Unequal Outside Options

Mohammad Akbarpour and Winnie van Dijk
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Mohammad Akbarpour: Graduate School of Business, Stanford University

Research Papers from Stanford University, Graduate School of Business

Abstract: Students with identical valuations for public schools but unequal outside options have different opportunity costs of revealing their preferences. Consequently, manipulable mechanisms need not resolve conflicting preferences in a Pareto-improving manner. We show that when they do not, welfare improvements for students with outside options come at the expense of students without outside options. This result strengthens the argument that strategyproof mechanisms “level the playing field.†Our model predicts that students without outside options are more likely to strategize, consistent with recent findings in empirical studies of education markets.

JEL-codes: D47 D82 I24 (search for similar items in EconPapers)
Date: 2018-09
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Citations: View citations in EconPapers (3)

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