Deferred Acceptance with News Utility / Bnaya Dreyfuss, Ofer Glicksohn, Ori Heffetz, Assaf Romm.

Format:

Book

Author/Creator:

Dreyfuss, Bnaya.

Contributor:

National Bureau of Economic Research.

Glicksohn, Ofer.

Heffetz, Ori.

Romm, Assaf.

Series:

Working Paper Series (National Bureau of Economic Research) no. w30635.

NBER working paper series no. w30635

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2022.

Summary:

Can incorporating expectations-based-reference-dependence (EBRD) considerations reduce seemingly dominated choices in the Deferred Acceptance (DA) mechanism? We run two experiments (total N = 500) where participants are randomly assigned into one of four DA variants--{static, dynamic} × {student proposing, student receiving}--and play ten simulated large-market school-assignment problems. While a standard, reference-independent model predicts the same straightforward behavior across all problems and variants, a news-utility EBRD model predicts stark differences across variants and problems. As the EBRD model predicts, we find that (i) across variants, dynamic student receiving leads to significantly fewer deviations from straightforward behavior, (ii) across problems, deviations increase with competitiveness, and (iii) within specific problems, the specific deviations predicted by the EBRD model are indeed those commonly observed in the data.

Notes:

Print version record

November 2022.