Simple Manipulations in School Choice Mechanisms

Shirakawa, Ryo

doi:10.1257/mic.20230116

Abstract

Market design mechanisms are often required to be strategy-proof, ensuring that no misreporting is profitable. This, however, may be overly restrictive: Real-world participants may be unable to engage in complex misreporting. In the context of school choice, this paper proposes that mechanisms ought to be immune only to certain 鈥渟imple鈥� misreports. While no strategy-proof mechanism Pareto improves on the deferred acceptance mechanism, we find one under our weaker requirement: Kesten鈥檚 (2010) efficiency adjusted deferred acceptance. By extending our criterion to also prevent simple 鈥渃ollective鈥� misreports, we obtain characterizations of Kesten鈥檚 mechanism. These insights contribute to practical market design.

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Microeconomics