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Consistent Pareto improvement over the student-optimal stable mechanism

Author

Listed:
  • Battal Doğan

    (University of Bristol)

  • M. Bumin Yenmez

    (Boston College)

Abstract

We show that there is no consistent Pareto improvement over any stable mechanism. We introduce the following weakly consistent Pareto improvement (over the student-optimal stable matching) requirement: whenever a set of students, each of whom is assigned to a school that is underdemanded at the student-optimal stable matching, is removed with their assigned seats, then the assignments of the remaining students do not change. Our main result is that the efficiency-adjusted deferred acceptance mechanism (Kesten in Q J Econ 125(3):1297–1348, 2010) is the unique weakly consistent Pareto improvement over the student-optimal stable mechanism.

Suggested Citation

  • Battal Doğan & M. Bumin Yenmez, 2020. "Consistent Pareto improvement over the student-optimal stable mechanism," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(1), pages 125-137, April.
    • Handle: RePEc:spr:etbull:v:8:y:2020:i:1:d:10.1007_s40505-019-00172-6
    DOI: 10.1007/s40505-019-00172-6
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    References listed on IDEAS

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    More about this item

    Keywords

    Market design; School choice; Consistency; Weak consistency; EADAM;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • I20 - Health, Education, and Welfare - - Education - - - General

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