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Parallel Markets in School Choice

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  • Afacan, Mustafa Oguz
  • Evdokimov, Piotr
  • Hakimov, Rustamdjan
  • Turhan, Bertan

Abstract

When applying to schools, students often submit applications to distinct school systems that operate independently, which leads to waste and distortions of stability due to miscoordination. To alleviate this issue, Manjunath and Turhan (2016) introduce the Iterative Deferred Acceptance mechanism (IDA); however, this mechanism is not strategy-proof. We design an experiment to compare the performance of this mechanism under parallel markets (DecDA2) to the classic Deferred Acceptance mechanism with both divided (DecDA) and unified markets (DA). Consistent with the theory, we find that both stability and efficiency are highest under DA, intermediate under DecDA2, and lowest under DecDA. We observe that some subjects use strategic reporting when predicted, leading to improved efficiency for all participants of the market. Our findings cast doubt on whether strategy-proofness should be perceived as a universal constraint to market mechanisms.

Suggested Citation

  • Afacan, Mustafa Oguz & Evdokimov, Piotr & Hakimov, Rustamdjan & Turhan, Bertan, 2021. "Parallel Markets in School Choice," ISU General Staff Papers 202106130700001128, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:202106130700001128
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    Cited by:

    1. Yannai A. Gonczarowski & Michael Yin & Shirley Zhang, 2024. "Multi-District School Choice: Playing on Several Fields," Papers 2403.04530, arXiv.org, revised Nov 2025.
    2. Tommy Andersson & Umut Dur & Sinan Ertemel & Onur Kesten, 2024. "Sequential school choice with public and private schools," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 63(2), pages 231-276, September.
    3. Roy Chen & Peter Katuščák & Thomas Kittsteiner & Katharina Kütter, 2024. "Does disappointment aversion explain non-truthful reporting in strategy-proof mechanisms?," Experimental Economics, Springer;Economic Science Association, vol. 27(5), pages 1184-1210, November.
    4. Mustafa Oğuz Afacan & Inácio Bó & Bertan Turhan, 2023. "Assignment maximization," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(1), pages 123-138, February.
    5. Cho, Wonki Jo & Hafalir, Isa E. & Lim, Wooyoung, 2022. "Tie-breaking and efficiency in the laboratory school choice," Journal of Economic Theory, Elsevier, vol. 205(C).

    More about this item

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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