Bobby Pakzad-Hurson (Brown University) gave a talk on "Do Peer Preferences Matter in School Choice Market Design? Theory and Evidence".
Abstract: Can a clearinghouse generate a stable matching–one in which no student wants to leave her university program for another program willing to accept her–if it does not allow students to express their preferences over both programs and peers? Application data from Australia’s centralized college admissions system show that students have preferences over the academic abilities of their peers, and that the effect of peer preferences is large; we estimate 20% of students would have matched with a different program in the counterfactual world without peer references. However, the matching mechanism used only allows students to express preferences over programs, not over peers. Theoretically, we show that a stable matching exists with peer preferences under mild conditions, but finding one via canonical mechanisms is unlikely. We show that increasing transparency about the previous cohort of students enrolling at each program, analogously to the process in the Australian market, induces a tâtonnement wherein the distributions of former students play the role of prices. We theoretically model this process and develop a test for match stability. We implement this test empirically to show that the Australian market fails to converge to stability over time, and that this instability especially affects low socioeconomic status students. To address these issues, we propose a new mechanism that improves upon the current design, and we show that this mechanism generates a stable matching in the Australian market.
See more research by Bobby Pakzad-Hurson: https://sites.google.com/a/brown.edu/bph/home
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17th Matching in Practice workshop, May 10-11, 2021
HSE University, St. Petersburg, Russia
Workshop Webpage: https://game.hse.ru/en/mip17
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