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Does disappointment aversion explain non-truthful reporting in strategy-proof mechanisms?

Author

Listed:
  • Roy Chen

    (RWTH Aachen University)

  • Peter Katuščák

    (RWTH Aachen University)

  • Thomas Kittsteiner

    (RWTH Aachen University)

  • Katharina Kütter

    (RWTH Aachen University)

Abstract

Disappointment aversion has been suggested as an explanation for non-truthful rankings in strategy-proof school-choice matching mechanisms. We test this hypothesis using a novel experimental design that eliminates important alternative causes of non-truthful rankings. The design uses a simple contingent choice task with only two possible outcomes. Between two treatments, we manipulate the possibility for disappointment aversion to have an effect on ranking. We find a small and statistically marginally significant treatment effect in the direction predicted by disappointment aversion. We therefore conclude that disappointment aversion is a minor contributor to non-truthful rankings in strategy-proof school-choice matching mechanisms.

Suggested Citation

  • Roy Chen & Peter Katuščák & Thomas Kittsteiner & Katharina Kütter, 2024. "Does disappointment aversion explain non-truthful reporting in strategy-proof mechanisms?," Experimental Economics, Springer;Economic Science Association, vol. 27(5), pages 1184-1210, November.
    • Handle: RePEc:kap:expeco:v:27:y:2024:i:5:d:10.1007_s10683-024-09847-9
    DOI: 10.1007/s10683-024-09847-9
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    More about this item

    Keywords

    Matching; Loss aversion; Strategy-proofness; Experiment; School choice; Market design;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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