Intergenerational Advice and Matching: An Experimental Study

This paper is motivated by the idea that economic mechanisms should be tested in the environments in which they are used in the real world. For example, in school matching parents whose children are currently in the match receive advice from their predecessors. We investigate the impact of this intergenerational advice and demonstrate that it is dramatic. We find that while subjects who repeatedly play the Gale-Shapley mechanism for 20 rounds wind up reporting truthfully 77% of the time, those who play the game once and get advice from their predecessors, wind up reporting truthfully only 44% of the time. We offer an explanation for this result that contrasts the experiential learning that takes place in our repeated treatments with the social learning that takes place in our intergenerational treatments.