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School choice with vouchers

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  • Afacan, Mustafa Oǧuz

Abstract

We introduce a novel school-choice with vouchers model. A feasibility notion is defined to incorporate the constraint that students from low-income families need a voucher to go to a private school. We then introduce a stability notion, while emphasizing that the traditional school-choice model and usual stability notion are realized as a special case of our formulation. A class of feasible, stable, and constrained efficient mechanisms is proposed. However, feasibility and stability are incompatible with strategy-proofness in the sense that no mechanism is feasible, stable, and strategy-proof at the same time, implying that any mechanism in our class is manipulable. Given the efficiency and strategic disadvantages of stability, as an alternative solution, we introduce a feasible, efficient, and strategy-proof mechanism. Lastly, we provide a comparative statics analysis.

Suggested Citation

  • Afacan, Mustafa Oǧuz, 2019. "School choice with vouchers," Journal of Economic Theory, Elsevier, vol. 179(C), pages 57-72.
    • Handle: RePEc:eee:jetheo:v:179:y:2019:i:c:p:57-72
    DOI: 10.1016/j.jet.2018.10.013
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    References listed on IDEAS

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    1. Alvin E. Roth & Tayfun Sönmez & M. Utku Ünver, 2004. "Kidney Exchange," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(2), pages 457-488.
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    6. Mustafa Og̃uz Afacan & Zeynel Harun Aliog̃ulları & Mehmet Barlo, 2017. "Sticky matching in school choice," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 64(3), pages 509-538, October.
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    More about this item

    Keywords

    Voucher; School choice; Matching; Stability; Efficiency; Strategy-proofness;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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