“School Competition in Centralized Admissions” by Y. Stephen CHIU
Y. Stephen CHIU
The University of Hong Kong
The Gale and Shapley (1962) students-propose-to-schools mechanism is universally praised for its powerful result that students have reporting their preferences truthfully as their weakly dominant strategies, even when schools may mis-specify their own preferences. Here we study a type of school manipulation that leads to a breakdown of the aforementioned result. Specifically, we study a school’s policy that pre-commits to admitting qualified applicants who wrote the school as top choice over more qualified applicants who did not. We investigate under what circumstances the policy is able to influence applicants’ reports of preferences, and under what circumstances the policy will indeed enhance that schools’ quality of intakes. We also study issues such as preemption, contagion, and prisoner dilemmas when schools’ policies are endogenized.