University Admissions Mechanism: Theoretical Analysis with Application to Russian Universities

The Russian university admissions mechanism which is based upon a combination of the university proposing deferred acceptance algorithm and serial dictatorship is shown to generate unstable and manipulable allocations. To improve on the mechanism, we propose a sequenced student proposing deferred acceptance (DA) algorithm with a serial dictatorship which is followed after every cycle of the student-proposing DA, allocating state-funded placements and offering the opportunity to decommit and be allocated to tuition placements based on the hybrid STB-MTB tie-breaking rules (Single Tie Breaking – Multiple Tie Breaking rules). The proposed algorithm will satisfy both stability and strategyproofness assuming the Russian higher education system is defined as a large market and universities cannot manipulate their preferences. In addition, this paper deals with the possibility of students taking a risk of preference misrepresentation to improve their allocation despite the fact the mechanism is strategy-proof and chances of success are low. We identify that the profitability of preference misrepresentation depends on the size of the market (the number of universities participating in the algorithm), preference list size, and existence of a recommendation mechanism. The paper also reviews how truth-telling can be promoted specifically in the form of recommendation mechanisms being applied in the university admissions systems.