The instability of matching with overconfident agents
Games and Economic Behavior | Elsevier | Published : 2019
Many centralized college admissions markets allocate seats to students based on their performance on a single standardized exam. The exam's measurement error can cause the exam-derived priorities to deviate from colleges’ aptitude-based preferences. Previous literature proposes to combine pre-exam preference submission with a Boston algorithm (a PreExam-BOS mechanism). This paper examines the proposed mechanism in an experiment where students are not fully informed of their relative aptitudes. The results show pre-exam preference submission is distorted by overconfidence and PreExam-BOS fails to achieve stable matching with respect to aptitudes. Compared to a post-score Serial Dictatorship m..View full abstract
I am deeply indebted to my advisor Paul J. Healy for countless conversations and encouragement while advising me on this project. I would like to thank John Kagel, Lucas Coffman, Katie Baldiga Coffman, Huanxing Yang, Yaron Azrieli, Hal Arkes, Clayton Featherstone, Yan Chen, John Hatfield, SangMok Lee, Marek Pycia, Alex Gotthard-Real, Ritesh Jain, Anthony Bradfield. seminar participants at the Ohio State University, and audiences at the 2015 North American Economic Science Association Conference and the 2017 SAET Conference on Current Trends in Economics for helpful comments and inspiration. I am grateful to Ming Jiang, Hengli Zhang, Ming Pan, and Qiquan Xu for their help in the data collection process. This project was supported by JMCB Grants for Graduate Student Research in Economics. All remaining errors are mine.