Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/265419 
Year of Publication: 
2022
Series/Report no.: 
ZEW Discussion Papers No. 22-046
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
How should students be assigned to schools? Two mechanisms have been suggested and implemented around the world: deferred acceptance (DA) and top trading cycles (TTC). These two mechanisms are widely considered excellent choices because they are strategy-proof, in addition to DA's no justified envy and TTC's Pareto optimality. We show theoretically and empirically that both mechanisms perform poorly with regard to two key desiderata such as efficiency and equality, even in large markets. In contrast, the rank-minimizing mechanism (RM) is significantly more efficient and egalitarian. It is also Pareto optimal for the students, unlike DA, and generates less justified envy than TTC.
Subjects: 
school choice
inequality
efficiency
justified envy
JEL: 
C78
D73
Document Type: 
Working Paper

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