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Gaming the Boston School Choice Mechanism in Beijing

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  • He, Yinghua

Abstract

The Boston mechanism has been criticized for its poor incentive and welfare performance compared with the deferred-acceptance mechanism (DA). Using school choice data from Beijing where the Boston mechanism without school priorities is adopted, I investigate parents' behavior and allow for possible mistakes. Evidence shows that parents are overcautious because they play ``safe'' strategies too often. There is no evidence that wealthier/more-educated parents are more adept at strategizing. If others behave as indicated in the data, an average naive parent who always reports her true preferences experiences a utility loss in switching from the Boston to the DA mechanism (equivalent to random serial dictatorship in this setting), corresponding to an 8% increase in the distance from home to school or substituting a 13% chance at the best school with an equal chance at the second-best school. She has a 27% (55%) chance of being better (worse) off. If parents are instead either sophisticated (they always play a best response against others) or naive, the results are mixed: under DA, naive parents enjoy a utility gain on average when less than 80% of the population is naive, while still about 42% are worse off and only 39% are better off. Sophisticated parents always lose more.

Suggested Citation

  • He, Yinghua, 2015. "Gaming the Boston School Choice Mechanism in Beijing," TSE Working Papers 15-551, Toulouse School of Economics (TSE), revised Sep 2017.
    • Handle: RePEc:tse:wpaper:28970
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    More about this item

    Keywords

    Boston Immediate-Acceptance Mechanism; Gale-Shapley Deferred-Acceptance Mechanism; School Choice; Bayesian Nash Equilibrium; Strategy-Proofness; Moment Inequalities; Maximin Preferences;
    All these keywords.

    JEL classification:

    • C57 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Econometrics of Games and Auctions
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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