When Do Stable Matching Mechanisms Fail? The Role of Standardized Tests in College Admissions

45 Pages Posted: 5 Jan 2021

See all articles by Ming Jiang

Ming Jiang

Shanghai Jiao Tong University

Date Written: March 31, 2019

Abstract

In this paper, I investigate matching problems where priorities and preferences are misaligned. In the case of centralized college admissions, students are matched based on their test scores in standardized tests (priorities), a noisy realization of their aptitudes (colleges' preferences) due to measurement errors. I show that in this case any matching mechanism that is stable with respect to priority is not stable with respect to preference. The resulting instability leads to market unraveling. However, a manipulable mechanism such as the Boston mechanism, combined with limited information about priorities, may succeed in mending this market failure. I then design and conduct a laboratory experiment where I compare the performance of two mechanisms (the Boston mechanism and the Deferred Acceptance mechanism), under two timing conditions of the submission of students' rank-ordered lists of colleges (before the exam and after the exam), using a market design with both one-sided centralized matching and two-sided decentralized early admissions. In the experiment, the Boston mechanism under pre-exam submission condition performs better than the Deferred Acceptance mechanism in reducing market unraveling, which confirms the theoretical predictions.

Keywords: matching, experiment, market design, college admissions

JEL Classification: C78, C92, D47, D82

Suggested Citation

Jiang, Ming, When Do Stable Matching Mechanisms Fail? The Role of Standardized Tests in College Admissions (March 31, 2019). Available at SSRN: https://ssrn.com/abstract=3722529 or http://dx.doi.org/10.2139/ssrn.3722529

Ming Jiang (Contact Author)

Shanghai Jiao Tong University ( email )

1194 Huashan Rd
Shanghai, Shanghai 200030
China

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