Seminar in Microeconomics - Inâcio Bô (WZB Berlin Social Science Center)
The Iterative Deferred Acceptance Mechanism
Monday 12 November 2018 (12h15 - 13h30) - Internef - 149
We introduce a new mechanism for one-sided matching markets, inspired by
procedures currently being used to match millions of students to public universities in Brazil
and China. Unlike most mechanisms available in the literature, which ask students for a
full preference ranking over all colleges, they are instead sequentially asked to make choices
among sets of colleges. These choices are used to produce, in each step, a tentative allocation.
If at some point it is determined that a student cannot be accepted into a college,
then she is asked to make another choice among those which would tentatively accept her.
Participants following the simple strategy of choosing the most preferred college in each step
is a robust equilibrium that yields the Student Optimal Stable Matching. We also provide an
extension in which, after running the sequential mechanism for a number of steps students
are asked to submit a ranking over the colleges that are still within reach. This constitutes
a novel approach to matching mechanisms. We show that the initial sequential stage clears
a substantial part of the market before the rankings submission. This finding, together with
empirical and simulation results, makes our proposal an attractive alternative to the sequential
mechanisms currently being used and the standard Gale-Shapley Deferred Acceptance
mechanism for practical applications.
Bettina Klaus & Rustamdjan Hakimov