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Course Bidding At Business Schools

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  • Tayfun Sönmez
  • M. Utku Ünver

Abstract

Mechanisms that rely on course bidding are widely used at business schools in order to allocate seats at oversubscribed courses. Bids play two key roles under these mechanisms: to infer student preferences and to determine who have bigger claims on course seats. We show that these two roles may easily conflict, and preferences induced from bids may significantly differ from the true preferences. Therefore, these mechanisms, which are promoted as market mechanisms, do not necessarily yield market outcomes. We introduce a Pareto-dominant market mechanism that can be implemented by asking students for their preferences in addition to their bids over courses. Copyright (2010) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Tayfun Sönmez & M. Utku Ünver, 2010. "Course Bidding At Business Schools," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(1), pages 99-123, February.
    • Handle: RePEc:ier:iecrev:v:51:y:2010:i:1:p:99-123
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    References listed on IDEAS

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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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