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"Strategic" Behavior in a Strategy-Proof Environment

Author

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  • Avinatan Hassidim
  • Assaf Romm
  • Ran I. Shorrer

Abstract

We present direct field evidence of preference misrepresentation under deferred acceptance. The high-stakes admission process to graduate studies in psychology in Israel was centralized using the applicant-proposing version of deferred acceptance. Yet, a large fraction of these highly educated individuals, who had been informed about the strategy-proof nature of the mechanism in numerous ways, failed to play truthfully. Out of 704 rank-ordered lists that included a non-funded position in a program that offered funded positions, we found that in 137 (over 19%) the non-funded position was ranked higher (or the funded position was not ranked at all). This is despite the fact that the applicants had been informed that rank-ordered lists are never made public, funding is considered a positive signal of ability, and funding comes with no strings attached. Preference misrepresentation is associated with weaker applicants. We provide evidence from a laboratory experiment of a strong, causal, negative relationship between applicants? expected desirability and preference misrepresentation.

Suggested Citation

  • Avinatan Hassidim & Assaf Romm & Ran I. Shorrer, 2016. ""Strategic" Behavior in a Strategy-Proof Environment," Working Paper 413411, Harvard University OpenScholar.
  • Handle: RePEc:qsh:wpaper:413411
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    File URL: http://scholar.harvard.edu/ran/node/413411
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    Cited by:

    1. repec:oup:restud:v:86:y:2019:i:1:p:81-116. is not listed on IDEAS
    2. Eduardo M Azevedo & Eric Budish, 2019. "Strategy-proofness in the Large," Review of Economic Studies, Oxford University Press, vol. 86(1), pages 81-116.
    3. repec:kap:expeco:v:20:y:2017:i:3:d:10.1007_s10683-016-9505-0 is not listed on IDEAS
    4. Basteck, Christian & Mantovani, Marco, 2018. "Cognitive ability and games of school choice," Games and Economic Behavior, Elsevier, vol. 109(C), pages 156-183.
    5. repec:oup:oxford:v:33:y:2017:i:4:p:541-571. is not listed on IDEAS
    6. Scott Duke Kominers & Alexander Teytelboym & Vincent P Crawford, 2017. "An invitation to market design," Oxford Review of Economic Policy, Oxford University Press, vol. 33(4), pages 541-571.
    7. repec:aea:aecrev:v:107:y:2017:i:11:p:3257-87 is not listed on IDEAS
    8. Avinatan Hassidim & Déborah Marciano & Assaf Romm & Ran I. Shorrer, 2017. "The Mechanism Is Truthful, Why Aren't You?," American Economic Review, American Economic Association, vol. 107(5), pages 220-224, May.
    9. Breitmoser, Yves & Schweighofer-Kodritsch, Sebastian, 2019. "Obviousness Around the Clock," Rationality and Competition Discussion Paper Series 151, CRC TRR 190 Rationality and Competition.
    10. Maria Kyropoulou & Josu'e Ortega & Erel Segal-Halevi, 2018. "Fair Cake-Cutting in Practice," Papers 1810.08243, arXiv.org, revised Nov 2018.
    11. repec:eee:jetheo:v:177:y:2018:i:c:p:405-425 is not listed on IDEAS
    12. Jan Christoph Schlegel, 2018. "Equivalent Choice Functions and Stable Mechanisms," Papers 1812.10326, arXiv.org, revised Jan 2019.
    13. Alex Rees-Jones & Dmitry Taubinsky, 2018. "Taxing Humans: Pitfalls of the Mechanism Design Approach and Potential Resolutions," Tax Policy and the Economy, University of Chicago Press, vol. 32(1), pages 107-133.
    14. Kyropoulou, Maria & Ortega, Josué & Segal-Halevi, Erel, 2018. "Fair cake-cutting in practice," ZEW Discussion Papers 18-053, ZEW - Leibniz Centre for European Economic Research.
    15. Eric Budish & Judd B. Kessler, 2016. "Bringing Real Market Participants' Real Preferences into the Lab: An Experiment that Changed the Course Allocation Mechanism at Wharton," NBER Working Papers 22448, National Bureau of Economic Research, Inc.
    16. Shengwu Li, 2017. "Obviously Strategy-Proof Mechanisms," American Economic Review, American Economic Association, vol. 107(11), pages 3257-3287, November.
    17. He, Yinghua & Magnac, Thierry, 2018. "A Pigouvian Approach to Congestion in Matching Markets," IZA Discussion Papers 11967, Institute of Labor Economics (IZA).

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