Crowding in School Choice
William Phan, Ryan Tierney, Yu Zhou
American Economic Review · 2024 · Volume 114 · Issue 8
Abstract
We consider the market design problem of matching students to schools in the presence of crowding effects. These effects are salient in parents' decision-making and the empirical literature; however, they cause difficulties in the design of satisfactory mechanisms and, as such, are not currently considered. We propose a new framework and an equilibrium notion that accommodates crowding, no-envy, and respect for priorities. The equilibrium has a student-optimal element that induces an incentive-compatible mechanism and is implementable via a novel algorithm. Moreover, analogs of fundamental structural results of the matching literature (the rural hospitals theorem, welfare lattice, etc.) survive.
Keywords
Market Design, State and Local Government: Health, Education, Welfare, Public Pensions, Analysis of Education, Education: Government Policy
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