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  4. June 2022
  5. Efficient Matching in the School Choice Problem

Efficient Matching in the School Choice Problem

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Abstract

Stable matchings in school choice needn't be Pareto efficient and can leave thousands of students worse off than necessary. Call a matching μ priority-neutral if no matching can make any student whose priority is violated by μ better off without violating the priority of some student who is made worse off. Call a matching priority-efficient if it is priority-neutral and Pareto efficient. We show that there is a unique priority-efficient matching and that it dominates every priority-neutral matching and every stable matching. Moreover, truth-telling is a maxmin optimal strategy for every student in the mechanism that selects the priority-efficient matching.

Citation

Reny, Philip J. 2022. "Efficient Matching in the School Choice Problem." American Economic Review, 112 (6): 2025-43. DOI: 10.1257/aer.20210240

Additional Materials

JEL Classification

  • C78 Bargaining Theory; Matching Theory
  • I21 Analysis of Education
  • I28 Education: Government Policy