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Improving efficiency and equality in school choice

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  • Ortega, Josue
  • Klein, Thilo

Abstract

How should students be assigned to schools? Two mechanisms have been suggested and implemented around the world: deferred acceptance (DA) and top trading cycles (TTC). These two mechanisms are widely considered excellent choices because they are strategy-proof, in addition to DA's no justified envy and TTC's Pareto optimality. We show theoretically and empirically that both mechanisms perform poorly with regard to two key desiderata such as efficiency and equality, even in large markets. In contrast, the rank-minimizing mechanism (RM) is significantly more efficient and egalitarian. It is also Pareto optimal for the students, unlike DA, and generates less justified envy than TTC.

Suggested Citation

  • Ortega, Josue & Klein, Thilo, 2022. "Improving efficiency and equality in school choice," ZEW Discussion Papers 22-046, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:22046
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    References listed on IDEAS

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    Cited by:

    1. Estelle Cantillon & Li Chen & Juan S. Pereyra, 2022. "Respecting priorities versus respecting preferences in school choice: When is there a trade-off?," Papers 2212.02881, arXiv.org, revised Jan 2024.
    2. Peter Troyan, 2022. "Non-Obvious Manipulability of the Rank-Minimizing Mechanism," Papers 2206.11359, arXiv.org.
    3. Estelle Cantillon & Li Chen & Juan Sebastian Pereyra Barreiro, 2022. "Respecting priorities versus respecting preferences in school choice: When is there a trade-off ?," Working Papers ECARES 2022-39, ULB -- Universite Libre de Bruxelles.

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    More about this item

    Keywords

    school choice; inequality; efficiency; justified envy;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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