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Improving schools through school choice: A market design approach

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  • Hatfield, John William
  • Kojima, Fuhito
  • Narita, Yusuke

Abstract

We study the effect of different centralized public 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 improves, i.e., becomes more preferred by students. We first show that neither any stable mechanism nor 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.

Suggested Citation

  • Hatfield, John William & Kojima, Fuhito & Narita, Yusuke, 2016. "Improving schools through school choice: A market design approach," Journal of Economic Theory, Elsevier, vol. 166(C), pages 186-211.
  • Handle: RePEc:eee:jetheo:v:166:y:2016:i:c:p:186-211
    DOI: 10.1016/j.jet.2016.07.001
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    3. Scott Duke Kominers & Alexander Teytelboym & Vincent P Crawford, 2017. "An invitation to market design," Oxford Review of Economic Policy, Oxford University Press, vol. 33(4), pages 541-571.
    4. Klijn, Flip & Pais, Joana & Vorsatz, Marc, 2020. "Improving schools through school choice: An experimental study of deferred acceptance," Economics Letters, Elsevier, vol. 186(C).
    5. Péter Biró & Flip Klijn & Xenia Klimentova & Ana Viana, 2021. "Shapley-Scarf Housing Markets: Respecting Improvement, Integer Programming, and Kidney Exchange," Working Papers 1235, Barcelona School of Economics.
    6. Yun Liu, 2021. "On the Equivalence of Two Competing Affirmative Actions in School Choice," Papers 2112.14074, arXiv.org, revised Mar 2022.
    7. Mohammad Akbarpour & Julien Combe & Yinghua He & Victor Hiller & Robert Shimer & Olivier Tercieux, 2020. "Unpaired Kidney Exchange: Overcoming Double Coincidence of Wants without Money," Post-Print halshs-02973042, HAL.
    8. Eun Jeong Heo, 2019. "Preference profiles for efficiency, fairness, and consistency in school choice problems," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(1), pages 243-266, March.
    9. Xiaokuai Shao, 2021. "Matching under school and home bundling," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(3), pages 567-611, June.
    10. Jiao, Zhenhua & Shen, Ziyang, 2020. "On responsiveness of top trading cycles mechanism to priority-based affirmative action," Economics Letters, Elsevier, vol. 186(C).
    11. Di Feng & Yun Liu, 2022. "On the Asymptotic Performance of Affirmative Actions in School Choice," Papers 2202.03927, arXiv.org, revised Dec 2022.
    12. Chen, Yajing & Jiao, Zhenhua & Zhang, Yang & Zhao, Fang, 2021. "Resource allocation on the basis of priorities under multi-unit demand," Economics Letters, Elsevier, vol. 202(C).
    13. Zhenhua Jiao & Ziyang Shen & Guoqiang Tian, 2022. "When is the deferred acceptance mechanism responsive to priority-based affirmative action?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 58(2), pages 257-282, February.
    14. Yusuki Narita, 2016. "(Non)Randomization: A Theory of Quasi-Experimental Evaluation of School Quality," Cowles Foundation Discussion Papers 2056R, Cowles Foundation for Research in Economics, Yale University, revised Aug 2017.
    15. Pichl, Benjamin, 2019. "RAM: A collection of mechanisms for (indivisible) resource allocation in oTree," Journal of Behavioral and Experimental Finance, Elsevier, vol. 23(C), pages 133-137.
    16. Machado, Cecilia & Szerman, Christiane, 2016. "Centralized Admission and the Student-College Match," IZA Discussion Papers 10251, Institute of Labor Economics (IZA).
    17. Adam Kapor & Mohit Karnani & Christopher Neilson, 2019. "Negative Externalities of Off Platform Options and the Efficiency of Centralized Assignment Mechanisms," Working Papers 635, Princeton University, Department of Economics, Industrial Relations Section..
    18. Yusuke Narita, 2021. "A Theory of Quasi-Experimental Evaluation of School Quality," Management Science, INFORMS, vol. 67(8), pages 4982-5010, August.
    19. Machado, Cecilia & Szerman, Christiane, 2021. "Centralized college admissions and student composition," Economics of Education Review, Elsevier, vol. 85(C).
    20. Li, Mengling, 2020. "Ties matter: Improving efficiency in course allocation by allowing ties," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 354-384.
    21. Han, Xiang, 2018. "Stable and efficient resource allocation under weak priorities," Games and Economic Behavior, Elsevier, vol. 107(C), pages 1-20.
    22. Yusuke Narita, 2020. "A Theory of Quasi-Experimental Evaluation of School Quality," Working Papers 2020-085, Human Capital and Economic Opportunity Working Group.
    23. Aram Grigoryan, 2023. "Top trading cycles with reordering: improving match priority in school choice," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 60(3), pages 383-396, April.
    24. Yoichi Kasajima & Manabu Toda, 2021. "Singles monotonicity and stability in one-to-one matching problems," Working Papers 2023-1, Waseda University, Faculty of Political Science and Economics.
    25. Kamada, Yuichiro & Kojima, Fuhito, 2017. "Stability concepts in matching under distributional constraints," Journal of Economic Theory, Elsevier, vol. 168(C), pages 107-142.

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    More about this item

    Keywords

    School choice; School quality; Matching; Stability; Efficiency;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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