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Crowding in School Choice

Author

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  • William Phan
  • Ryan Tierney
  • Yu Zhou

Abstract

We consider the market design problem of matching students to schools in the presence of crowding effects. These effects are salient in parents' decision-making and the empirical literature; however, they cause difficulties in the design of satisfactory mechanisms and, as such, are not currently considered. We propose a new framework and an equilibrium notion that accommodates crowding, no-envy, and respect for priorities. The equilibrium has a student-optimal element that induces an incentive-compatible mechanism and is implementable via a novel algorithm. Moreover, analogs of fundamental structural results of the matching literature (the rural hospitals theorem, welfare lattice, etc.) survive.

Suggested Citation

  • William Phan & Ryan Tierney & Yu Zhou, 2024. "Crowding in School Choice," American Economic Review, American Economic Association, vol. 114(8), pages 2526-2552, August.
    • Handle: RePEc:aea:aecrev:v:114:y:2024:i:8:p:2526-52
    DOI: 10.1257/aer.20220626
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    References listed on IDEAS

    as
    1. Dur, Umut & Morrill, Thayer, 2018. "Competitive equilibria in school assignment," Games and Economic Behavior, Elsevier, vol. 108(C), pages 269-274.
    2. Tierney, Ryan, 2019. "The problem of multiple commons: A market design approach," Games and Economic Behavior, Elsevier, vol. 114(C), pages 1-27.
    3. Echenique, Federico & Yenmez, M. Bumin, 2007. "A solution to matching with preferences over colleagues," Games and Economic Behavior, Elsevier, vol. 59(1), pages 46-71, April.
    4. Dur, Umut Mert & Wiseman, Thomas, 2019. "School choice with neighbors," Journal of Mathematical Economics, Elsevier, vol. 83(C), pages 101-109.
    5. Talman, Dolf & Yang, Zaifu, 2008. "A dynamic auction for differentiated items under price rigidities," Economics Letters, Elsevier, vol. 99(2), pages 278-281, May.
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    Cited by:

    1. Tomoya KAZUMURA, 2020. "When can we design efficient and strategy-proof rules in package assignment problems?," Discussion papers e-21-008, Graduate School of Economics , Kyoto University.

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    More about this item

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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