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Course Bidding At Business Schools

Author Info

Listed author(s):
  • 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.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-2354.2009.00572.x
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Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 51 (2010)
Issue (Month): 1 (02)
Pages: 99-123

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Handle: RePEc:ier:iecrev:v:51:y:2010:i:1:p:99-123
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Find related papers by JEL classification:
  • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
  • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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  1. Paul Milgrom, 2000. "Putting Auction Theory to Work: The Simultaneous Ascending Auction," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 245-272, April.
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  10. Roth, Alvin E., 1985. "The college admissions problem is not equivalent to the marriage problem," Journal of Economic Theory, Elsevier, vol. 36(2), pages 277-288, August.
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