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Optimal student allocation with peer effects

Author

Listed:
  • Roberto Sarkisian

    (Sao Paulo School of Economics - FGV)

  • Takuro Yamashita

    (Osaka University)

Abstract

This paper studies an optimal assignment problem of heterogenous students to schools with a particular kind of preference complementarity: peer effects, defined by the average ability of those in the same school. The tractability of the problem allows us to characterize the optimal assignment mechanism, which has a simple “(stochastic) pass-fail” structure. Its shape is mainly determined by the convexity/concavity of the attainment function, interpreted as the preference for/against having diverse-ability students in different schools. We also provide comparative statics as to when more or less mixture of heterogenous ability types would be desirable.

Suggested Citation

  • Roberto Sarkisian & Takuro Yamashita, 2024. "Optimal student allocation with peer effects," Review of Economic Design, Springer;Society for Economic Design, vol. 28(3), pages 551-571, September.
    • Handle: RePEc:spr:reecde:v:28:y:2024:i:3:d:10.1007_s10058-024-00349-x
    DOI: 10.1007/s10058-024-00349-x
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    References listed on IDEAS

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