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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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    Cited by:

    1. Ran I. Shorrer & Sandor Sovago, 2017. "Obvious Mistakes in a Strategically Simple College Admissions Environment," Tinbergen Institute Discussion Papers 17-107/V, Tinbergen Institute.
    2. de Haan, Monique & Gautier, Pieter A. & Oosterbeek, Hessel & van der Klaauw, Bas, 2015. "The performance of school assignment mechanisms in practice," CEPR Discussion Papers 10656, C.E.P.R. Discussion Papers.
    3. Caterina Calsamiglia & Chao Fu & Maia Güell, 2014. "Structural Estimation of a Model of School Choices: the Boston Mechanism vs. Its Alternatives," Working Papers 2014-21, FEDEA.
    4. Adam Kapor & Christopher A. Neilson & Seth D. Zimmerman, 2017. "Heterogeneous Beliefs and School Choice Mechanisms," Working Papers 612, Princeton University, Department of Economics, Industrial Relations Section..
    5. repec:eee:jcecon:v:47:y:2019:i:1:p:238-261 is not listed on IDEAS
    6. He, Yinghua & Magnac, Thierry, 2017. "Application Costs and Congestion in Matching Markets," TSE Working Papers 17-870, Toulouse School of Economics (TSE), revised Feb 2019.
    7. repec:aea:aecrev:v:109:y:2019:i:4:p:1486-1529 is not listed on IDEAS
    8. Carvalho, José-Raimundo & Magnac, Thierry & Xiong, Qizhou, 2014. "College Choice Allocation Mechanisms: Structural Estimates and Counterfactuals," IZA Discussion Papers 8550, Institute of Labor Economics (IZA).
    9. Fack, Gabrielle & Grenet, Julien & He, Yinghua, 2015. "Beyond Truth-Telling: Preference Estimation with Centralized School Choice," CEPR Discussion Papers 10907, C.E.P.R. Discussion Papers.
    10. Gabrielle Fack & Julien Grenet & Yinghua He, 2019. "Beyond Truth-Telling: Preference Estimation with Centralized School Choice and College Admissions," American Economic Review, American Economic Association, vol. 109(4), pages 1486-1529, April.
    11. He, Yinghua, 2012. "Gaming the Boston School Choice Mechanism in Beijing," TSE Working Papers 12-345, Toulouse School of Economics (TSE).
    12. 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, WZB Berlin Social Science Center.
    13. Nikhil Agarwal & Paulo Somaini, 2018. "Demand Analysis Using Strategic Reports: An Application to a School Choice Mechanism," Econometrica, Econometric Society, vol. 86(2), pages 391-444, March.
    14. Yinghua He & Antonio Miralles & Jianye Yan, 2012. "Competitive Equilibrium from Equal Incomes for Two-Sided Matching," Working Papers 692, Barcelona Graduate School of Economics.
    15. Min Zhu, 2013. "College Admissions in China : A Mechanism Design Perspective," Working Papers halshs-00860931, HAL.
    16. Harless, Patrick, 2014. "A School Choice Compromise: Between Immediate and Deferred Acceptance," MPRA Paper 61417, University Library of Munich, Germany.
    17. He, Yinghua & Magnac, Thierry, 2018. "A Pigouvian Approach to Congestion in Matching Markets," IZA Discussion Papers 11967, Institute of Labor Economics (IZA).
    18. 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.
    19. Alexis Le Chapelain, 2014. "Market for Education and Student Achievement," Sciences Po publications info:hdl:2441/1jgbspo1909, Sciences Po.
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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;

    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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