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When Does an Additional Stage Improve Welfare in Centralized Assignment?

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  • Battal Doğan
  • M. Bumin Yenmez

Abstract

We study multistage centralized assignments to allocate scarce resources based on priorities in the context of school choice. We characterize the capacity-priority profiles of schools under which an additional stage of assignment may improve student welfare when the deferred acceptance algorithm is used at each stage. If the capacity-priority profile is acyclic, then no student prefers any subgame-perfect Nash equilibrium (SPNE) outcome of the 2-stage enrollment system to the truthful equilibrium outcome of the 1-stage enrolment system. If the capacity-priority profile is not acyclic, then an SPNE outcome of the 2-stage enrollment system may Pareto dominate the truthful equilibrium outcome of the 1-stage enrollment system.

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  • Battal Doğan & M. Bumin Yenmez, 2018. "When Does an Additional Stage Improve Welfare in Centralized Assignment?," Bristol Economics Discussion Papers 18/704, Department of Economics, University of Bristol, UK.
    • Handle: RePEc:bri:uobdis:18/704
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    1. Marilda Sotomayor, 2008. "The stability of the equilibrium outcomes in the admission games induced by stable matching rules," International Journal of Game Theory, Springer;Game Theory Society, vol. 36(3), pages 621-640, March.
    2. Battal Dogan & Bettina Klaus, 2018. "Object Allocation via Immediate-Acceptance: Characterizations and an Affirmative Action Application," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 16.15, Université de Lausanne, Faculté des HEC, DEEP.
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