Abstract

The paper to be presented is:

Title: Need vs. Merit: The Large Core of College Admissions Markets
Authors: Avinatan Hassidim, Assaf Romm, and Ran I. Shorrer

Paper Abstract: We study college admissions markets, where colleges offer multiple funding levels. Colleges wish to recruit the best-qualified students subject to budget and capacity constraints. We show that student-proposing deferred acceptance is stable and strategy-proof for students, and that this mechanism implicitly allocates funding based on merit in colleges that report their preferences truthfully. Importantly, the set of stable allocations is large and the scope for manipulation by colleges is substantial, even in large markets. Successful manipulations consider applicants’ outside options (specifically, their financial need) when allocating funding. We corroborate our findings using data from Hungarian college admission where the centralized clearinghouse uses deferred acceptance. In particular, choosing a different stable allocation would increase the number of admitted students by at least 3%, and applicants from low socioeconomic backgrounds would benefit disproportionately.

Link to paper.

This week's presenter is: Clay Thomas, Princeton University.

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