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- Title
When does an additional stage improve welfare in centralized assignment?
- Authors
Doğan, Battal; Yenmez, M. Bumin
- Abstract
We study multistage centralized assignment systems to allocate scarce resources based on priorities in the context of school choice. We characterize schools' capacity-priority profiles under which an additional stage of assignment may improve student welfare when the deferred acceptance algorithm is used at each stage. If the capacity-priority profile is acyclic, then no student prefers any subgame-perfect Nash equilibrium (SPNE) outcome of the 2-stage system to the truthful dominant-strategy equilibrium outcome of the 1-stage system. If the capacity-priority profile is not acyclic, then an SPNE outcome of the 2-stage system may Pareto dominate the truthful dominant-strategy equilibrium outcome of the 1-stage system. If students are restricted to playing truncation strategies, an additional stage unambiguously improves student welfare: no student prefers the truthful dominant-strategy equilibrium outcome of the 1-stage system to any SPNE outcome of the 2-stage system.
- Subjects
NASH equilibrium; BIDDERS
- Publication
Economic Theory, 2023, Vol 76, Issue 4, p1145
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-023-01488-y