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Strategic Waiting in Centralized Matching: Daycare Assignment

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  • Kan Kuno

Abstract

In centralized assignment mechanisms, unassigned participants are often placed on waitlists to improve their chances in future rounds. However, I demonstrate that this practice may bring unintended welfare consequences on the participants, using data from the Japanese daycare system. The prioritization of waitlisted applicants introduces a dynamic incentive for applicants to manipulate their priority by strategically choosing to be waitlisted to secure positions at more selective daycares. I show that 30.0% of applicants do not list safety options when they initially apply and that those who benefit from additional priority are 8.1 percentage points more likely to avoid listing safety options than those who do not. Given the prevalence of such strategic waiting, I estimate a structural model of daycare choice that extends Agarwal and Somaini (2018) to a two-period model allowing for reapplication. By simulating a scenario without waitlist priority, I find that the current priority functions as a redistributive mechanism: through its abolition, early starters (age 0) experience a 34.1% decrease in welfare and a 1.7 percentage point increase in the likelihood of being waitlisted, whereas late starters (age 1) experience a 29.0% increase in welfare and a 6.9 percentage point decrease in the likelihood of being waitlisted.

Suggested Citation

  • Kan Kuno, 2023. "Strategic Waiting in Centralized Matching: Daycare Assignment," Papers 2311.07920, arXiv.org, revised Jan 2025.
    • Handle: RePEc:arx:papers:2311.07920
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    1. Caterina Calsamiglia & Chao Fu & Maia Güell, 2020. "Structural Estimation of a Model of School Choices: The Boston Mechanism versus Its Alternatives," Journal of Political Economy, University of Chicago Press, vol. 128(2), pages 642-680.
    2. Asai, Yukiko & Kambayashi, Ryo & Yamaguchi, Shintaro, 2015. "Childcare availability, household structure, and maternal employment," Journal of the Japanese and International Economies, Elsevier, vol. 38(C), pages 172-192.
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    Cited by:

    1. Yuichiro Kamada & Fuhito Kojima & Akira Matsushita, 2025. "The Walras-Bowley Lecture: Fragmentation of Matching Markets and How Economics Can Help Integrate Them," Papers 2508.19628, arXiv.org, revised Aug 2025.

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