Loss aversion in strategy-proof school-choice mechanisms
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arXiv
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| Main Authors: | , |
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| Format: | Preprint |
| Published: |
2022
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| _version_ | 1866912003159752704 |
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| author | Meisner, Vincent von Wangenheim, Jonas |
| author_facet | Meisner, Vincent von Wangenheim, Jonas |
| contents | Evidence suggests that participants in strategy-proof matching mechanisms play dominated strategies. To explain the data, we introduce expectation-based loss aversion into a school-choice setting and characterize choice-acclimating personal equilibria. We find that non-truthful preference submissions can be strictly optimal if and only if they are top-rank monotone. In equilibrium, inefficiency or justified envy may arise in seemingly stable or efficient mechanisms. Specifically, students who are more loss averse or less confident than their peers obtain suboptimal allocations. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2207_14666 |
| institution | arXiv |
| publishDate | 2022 |
| record_format | arxiv |
| spellingShingle | Loss aversion in strategy-proof school-choice mechanisms Meisner, Vincent von Wangenheim, Jonas Theoretical Economics Evidence suggests that participants in strategy-proof matching mechanisms play dominated strategies. To explain the data, we introduce expectation-based loss aversion into a school-choice setting and characterize choice-acclimating personal equilibria. We find that non-truthful preference submissions can be strictly optimal if and only if they are top-rank monotone. In equilibrium, inefficiency or justified envy may arise in seemingly stable or efficient mechanisms. Specifically, students who are more loss averse or less confident than their peers obtain suboptimal allocations. |
| title | Loss aversion in strategy-proof school-choice mechanisms |
| topic | Theoretical Economics |
| url | https://arxiv.org/abs/2207.14666 |