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Preference Intensities and Risk Aversion in School Choice: A Laboratory Experiment

Author

Listed:
  • Flip Klijn

    () (Harvard Business School)

  • Joana Pais

    () (Technical University of Lisbon
    UECE–Research Unit on Complexity and Economics)

  • Marc Vorsatz

    () (Fundacion de Estudios de Economia Aplicada (FEDEA))

Abstract

We experimentally investigate in the laboratory two prominent mechanisms that are employed in school choice programs to assign students to public schools. We study how individual behavior is influenced by preference intensities and risk aversion. Our main results show that (a) the Gale-Shapley mechanism is more robust to changes in cardinal preferences than the Boston mechanism independently of whether individuals can submit a complete or only a restricted ranking of the schools and (b) subjects with a higher degree of risk aversion are more likely to play "safer" strategies under the Gale-Shapley but not under the Boston mechanism. Both results have important implications for the efficiency and the stability of the mechanisms.

Suggested Citation

  • Flip Klijn & Joana Pais & Marc Vorsatz, 2010. "Preference Intensities and Risk Aversion in School Choice: A Laboratory Experiment," Harvard Business School Working Papers 10-093, Harvard Business School.
  • Handle: RePEc:hbs:wpaper:10-093
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    References listed on IDEAS

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    1. Pais, Joana & Pintér, Ágnes, 2008. "School choice and information: An experimental study on matching mechanisms," Games and Economic Behavior, Elsevier, vol. 64(1), pages 303-328, September.
    2. Atila Abdulkadiroğlu & Parag A. Pathak & Alvin E. Roth, 2005. "The New York City High School Match," American Economic Review, American Economic Association, vol. 95(2), pages 364-367, May.
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    4. Ergin, Haluk & Sonmez, Tayfun, 2006. "Games of school choice under the Boston mechanism," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 215-237, January.
    5. Caterina Calsamiglia & Guillaume Haeringer & Flip Klijn, 2010. "Constrained School Choice: An Experimental Study," American Economic Review, American Economic Association, vol. 100(4), pages 1860-1874, September.
    6. Barberà, S. & Dutta, B., 1995. "Protective behavior in matching models," Games and Economic Behavior, Elsevier, vol. 8(2), pages 281-296.
    7. Chen, Yan & Sonmez, Tayfun, 2006. "School choice: an experimental study," Journal of Economic Theory, Elsevier, vol. 127(1), pages 202-231, March.
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    9. Atila Abdulkadiroglu & Yeon-Koo Che & Yosuke Yasuda, 2011. "Resolving Conflicting Preferences in School Choice: The "Boston Mechanism" Reconsidered," American Economic Review, American Economic Association, vol. 101(1), pages 399-410, February.
    10. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    11. Atila Abdulkadiroğlu & Parag A. Pathak & Alvin E. Roth & Tayfun Sönmez, 2005. "The Boston Public School Match," American Economic Review, American Economic Association, vol. 95(2), pages 368-371, May.
    12. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    13. Atila Abdulkadiroglu & Tayfun Sönmez, 2003. "School Choice: A Mechanism Design Approach," American Economic Review, American Economic Association, vol. 93(3), pages 729-747, June.
    14. Haeringer, Guillaume & Klijn, Flip, 2009. "Constrained school choice," Journal of Economic Theory, Elsevier, vol. 144(5), pages 1921-1947, September.
    15. Atila Abdulkadiroglu & Parag A. Pathak & Alvin E. Roth, 2009. "Strategy-Proofness versus Efficiency in Matching with Indifferences: Redesigning the NYC High School Match," American Economic Review, American Economic Association, vol. 99(5), pages 1954-1978, December.
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    Citations

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    Cited by:

    1. Min Zhu, 2015. "Experience Transmission : Truth-telling Adoption in Matching," Working Papers 1518, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    2. Ran I. Shorrer & Sandor Sovago, 2017. "Obvious Mistakes in a Strategically Simple College Admissions Environment," Tinbergen Institute Discussion Papers 17-107/V, Tinbergen Institute.
    3. repec:kap:expeco:v:20:y:2017:i:3:d:10.1007_s10683-016-9505-0 is not listed on IDEAS
    4. Christian Basteck & Marco Mantovani, 2016. "Cognitive Ability and Games of School Choice," SFB 649 Discussion Papers SFB649DP2016-037, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    5. Min Zhu, 2015. "Experience Transmission: Truth-telling Adoption in Matching," Working Papers halshs-01176926, HAL.
    6. repec:jmi:articl:jmi-v1i1a2 is not listed on IDEAS
    7. Flip Klijn & Joana Pais & Marc Vorsatz, 2016. "Static versus Dynamic Deferred Acceptance in School Choice: Theory and Experiment," Working Papers 926, Barcelona Graduate School of Economics.
    8. Klijn, Flip & Pais, Joana & Vorsatz, Marc, 2016. "Affirmative action through minority reserves: An experimental study on school choice," Economics Letters, Elsevier, vol. 139(C), pages 72-75.
    9. repec:eee:eecrev:v:101:y:2018:i:c:p:505-511 is not listed on IDEAS
    10. Chen, Yan & Onur, Kesten, 2013. "From Boston to Chinese parallel to deferred acceptance: Theory and experiments on a family of school choice mechanisms," Discussion Papers, Research Unit: Market Behavior SP II 2013-205, Social Science Research Center Berlin (WZB).
    11. Jaimie W. Lien & Jie Zheng & Xiaohan Zhong, 2016. "Preference submission timing in school choice matching: testing fairness and efficiency in the laboratory," Experimental Economics, Springer;Economic Science Association, vol. 19(1), pages 116-150, March.
    12. Christian Basteck & Marco Mantovani, 2016. "Protecting Unsophisticated Applicants in School Choice through Information Disclosure," SFB 649 Discussion Papers SFB649DP2016-036, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    13. André Schmelzer, 2016. "Single versus Multiple Randomization in Matching Mechanisms," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2016_08, Max Planck Institute for Research on Collective Goods, revised Mar 2017.
    14. Wu, Binzhen & Zhong, Xiaohan, 2014. "Matching mechanisms and matching quality: Evidence from a top university in China," Games and Economic Behavior, Elsevier, vol. 84(C), pages 196-215.
    15. repec:eee:gamebe:v:103:y:2017:i:c:p:94-115 is not listed on IDEAS
    16. Min Zhu, 2013. "College Admissions in China : A Mechanism Design Perspective," Working Papers halshs-00860931, HAL.
    17. Guillen, Pablo & Hakimov, Rustamdjan, 2014. "Monkey see, monkey do: Truth-telling in matching algorithms and the manipulation of others," Discussion Papers, Research Unit: Market Behavior SP II 2014-202, Social Science Research Center Berlin (WZB).
    18. Janine Balter & Michela Rancan & Olena Senyuta, 2014. "Truncation in the Matching Markets and Market Ineffciency," RSCAS Working Papers 2014/04, European University Institute.
    19. Guillén, Pablo & Hakimov, Rustamdjan, 2015. "How to get truthful reporting in matching markets: A field experiment," Discussion Papers, Research Unit: Market Behavior SP II 2015-208, Social Science Research Center Berlin (WZB).
    20. Min Zhu, 2013. "College Admissions in China : A Mechanism Design Perspective," Working Papers 1327, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    21. Guillen, Pablo & Hakimov, Rustamdjan, 2015. "Less is more: A Field Experiment on Matching," Working Papers 2015-16, University of Sydney, School of Economics.
    22. repec:syd:wpaper:2123/9951 is not listed on IDEAS
    23. Zhu, Min, 2014. "College admissions in China: A mechanism design perspective," China Economic Review, Elsevier, vol. 30(C), pages 618-631.
    24. Alex Rees-Jones & Samuel Skowronek, 2018. "On the Limits of Incentive Design: Examining Medical Students' Misunderstanding of "the Match"," Papers 1802.01990, arXiv.org.
    25. Nicoló, Antonio & Rodríguez-Álvarez, Carmelo, 2012. "Transplant quality and patientsʼ preferences in paired kidney exchange," Games and Economic Behavior, Elsevier, vol. 74(1), pages 299-310.

    More about this item

    Keywords

    school choice; risk aversion; preference intensities; laboratory experiment; Gale-Shapley mechanism; Boston mechanism; efficiency; stability; constrained choice;

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • 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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