Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249024 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9479
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Evidence suggests that participants in direct student-proposing deferred-acceptance mechanisms (DA) play dominated strategies. To explain the data, we introduce expectation-based loss aversion into a school-choice setting and characterize choice-acclimating personal equilibria in DA. We find that non-truthful preference submissions can be strictly optimal if and only if they are top-choice monotone. In equilibrium, DA may implement allocations with justified envy. Specifically, it discriminates against students who are more loss averse or less confident than their peers, and amplifies already existing discrimination. To level the playing field, we propose sequential mechanisms as alternatives that are robust to these biases.
Subjects: 
market design
matching
school choice
reference-dependent preferences
loss aversion
deferred acceptance
JEL: 
C78
D47
D78
D81
D82
D91
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.