Student Placement to Public Schools in US: Two New Solutions

An increasingly popular practice in placing students to public schools in the US is the use of school choice programs. In a school choice program, each student submits a preference list of schools to a central authority which then decides upon how to place students to schools while also taking the priorities of students for schools into consideration. The crucial issue here is determining a central student placement mechanism that would ensure (1) equity (i.e., students’ priorities should be respected), (2) optimality, and (3) immunity to preference manipulation. We propse two new competing mechanisms as promising alternatives to those mechanisms that are both currently in use and that have been proposed in the existing literature. The …rst mechanism we propose eliminates the potentially large e¢ ciency loss in the well-known Gale-Shapley student optimal stable machanism, while achieving equity and immunity to preference manipulation to quite a satisfactory degree. The second mechanism we propose considerably improves the equity aspects of the top trading cycles mechanism of Abdulkadiro1⁄4 glu and Sönmez (Amer. Econ. Rev. 93, 2003, pp. 729-747) without paying any cost. Keywords: Student placement problem; E¢ ciency adjusted deferred acceptance mechanism; Equitable top trading cycles mechanism. JEL classi…cation: C78, C79, D61, D78, I20 Department of Economics, University of Rochester, NY 14627, USA. Tel: +1-585-2925195; Fax: +1-585-256-2309; e-mail: [email protected]. I am very much indebted to Professor William Thomson for his invaluable guidance and support. My most sincere thanks go to Serkan Zorba and Oguzhan Gencturk.