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Promoting School Competition Through School Choice: A Market Design Approach

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Author Info

  • John William Hatfield

    (Graduate School of Business, Stanford University)

  • Fuhito Kojima

    (Department of Economics, Stanford University)

  • Yusuke Narita

    ()
    (Department of Economics, MIT)

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    Abstract

    We study the effect of different school choice mechanisms on schools' incentives for quality improvement. To do so, we introduce the following criterion: A mechanism respects improvements of school quality if each school becomes weakly better off whenever that school becomes more preferred by students. We first show that no stable mechanism, or mechanism that is Pareto efficient for students (such as the Boston and top trading cycles mechanisms), respects improvements of school quality. Nevertheless, for large school districts, we demonstrate that any stable mechanism approximately respects improvements of school quality; by contrast, the Boston and top trading cycles mechanisms fail to do so. Thus a stable mechanism may provide better incentives for schools to improve themselves than the Boston and top trading cycles mechanisms.

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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Hatfield_Kojima_Narita_2011_promoting-school-competition.pdf
    File Function: First version, September 27, 2011
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    Bibliographic Info

    Paper provided by Human Capital and Economic Opportunity Working Group in its series Working Papers with number 2011-018.

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    Date of creation: Sep 2011
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    Handle: RePEc:hka:wpaper:2011-018

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    Related research

    Keywords: Matching; School Choice; School Competition; Stability; Efficiency;

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    References

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    1. Haeringer, Guillaume & Klijn, Flip, 2009. "Constrained school choice," Journal of Economic Theory, Elsevier, vol. 144(5), pages 1921-1947, September.
    2. Parag A. Pathak & Tayfun Sönmez, 2011. "School Admissions Reform in Chicago and England: Comparing Mechanisms by Their Vulnerability to Manipulation," NBER Working Papers 16783, National Bureau of Economic Research, Inc.
    3. Sönmez, Tayfun & Pathak, Parag A. & Abdulkadiroglu, Atila & Roth, Alvin, 2005. "The Boston Public School Match," Scholarly Articles 2562764, Harvard University Department of Economics.
    4. Ergin, Haluk & Sonmez, Tayfun, 2006. "Games of school choice under the Boston mechanism," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 215-237, January.
    5. Balinski, Michel & Sonmez, Tayfun, 1999. "A Tale of Two Mechanisms: Student Placement," Journal of Economic Theory, Elsevier, vol. 84(1), pages 73-94, January.
    6. Tayfun Sönmez & Tobias B. Switzer, 2011. "Matching with (Branch-of-Choice) Contracts at United States Military Academy," Boston College Working Papers in Economics 782, Boston College Department of Economics.
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    Cited by:
    1. Kumano, Taro, 2013. "Strategy-proofness and stability of the Boston mechanism: An almost impossibility result," Journal of Public Economics, Elsevier, vol. 105(C), pages 23-29.

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