Heterogeneous Beliefs and School Choice Mechanisms
Author | |
Abstract |
This paper studies how welfare outcomes in centralized school choice depend on the assignment mechanism when participants are not fully informed. Using a survey of school choice
participants in a strategic setting, we show that beliefs about admissions chances differ from rational expectations values and predict choice behavior. To quantify the welfare costs of belief errors, we estimate a model of school choice that incorporates subjective beliefs. We evaluate the equilibrium effects of switching to a strategy-proof deferred acceptance algorithm, and of improving households' belief accuracy. Allowing for belief errors reverses the welfare comparison to favor the deferred acceptance algorithm. |
Year of Publication |
2017
|
Number |
612
|
Date Published |
04/2017
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Publication Language |
eng
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Citation Key |
10241
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URL | |
Working Papers
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