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Dominated choices under deferred acceptance mechanism: The effect of admission selectivity

Author

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  • Shorrer, Ran I.
  • Sóvágó, Sándor

Abstract

College applicants often make dominated choices even when a strategically simple mechanism such as deferred acceptance is in place. We study Hungarian college admissions, where deferred acceptance is used, and still many college applicants make revealed dominated choices: they forgo the free opportunity to receive a tuition waiver. Using two empirical strategies, we show that when admission with a tuition waiver becomes more selective, applicants make more revealed dominated choices. Our results suggest that dominated choices respond to economic incentives.

Suggested Citation

  • Shorrer, Ran I. & Sóvágó, Sándor, 2024. "Dominated choices under deferred acceptance mechanism: The effect of admission selectivity," Games and Economic Behavior, Elsevier, vol. 144(C), pages 167-182.
    • Handle: RePEc:eee:gamebe:v:144:y:2024:i:c:p:167-182
    DOI: 10.1016/j.geb.2024.01.002
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    More about this item

    Keywords

    College admissions; Dominated strategies; Market design; Preference misrepresentation; School choice;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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