Title

Dynamic reserves in matching markets

Campus Units

Economics

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

7-2020

Journal or Book Title

Journal of Economic Theory

Volume

188

First Page or Article ID Number

105069

DOI

10.1016/j.jet.2020.105069

Abstract

We study a school choice problem under affirmative action policies where authorities reserve a certain fraction of the slots at each school for specific student groups, and where students have preferences not only over the schools they are matched to but also the type of slots they receive. Such reservation policies might cause waste in instances of low demand from some student groups. To propose a solution to this issue, we construct a family of choice functions, dynamic reserves choice functions, for schools that respect within-group fairness and allow the transfer of otherwise vacant slots from low-demand groups to high-demand groups. We propose the cumulative offer mechanism (COM) as an allocation rule where each school uses a dynamic reserves choice function and show that it is stable with respect to schools' choice functions, is strategy-proof, and respects improvements. Furthermore, we show that transferring more of the otherwise vacant slots leads to strategy-proof Pareto improvement under the COM.

JEL Classification

C78, D47, D61, D63

Comments

This is a working paper of an article published as Aygün, Orhan, and Bertan Turhan. "Dynamic reserves in matching markets." Journal of Economic Theory 188 (2020): 105069. doi: 10.1016/j.jet.2020.105069. Posted with permission.

Copyright Owner

Elsevier Inc.

Language

en

File Format

application/pdf

Published Version

Share

COinS