Cognitive Ability and Games of School Choice

Abstract

We take school admission mechanisms to the lab to test whether the widely-used manipulable Boston-mechanism disadvantages students of lower cognitive ability and whether this leads to ability segregation across schools. Results show this is the case: lower ability participants receive lower payoffs and are over-represented at the worst school. Under the strategy-proof Deferred Acceptance mechanism, payoff differences are reduced, and ability distributions across schools harmonized. Hence, we find support for the argument that a strategy-proof mechanisms "levels the playing-field". Finally, we document a trade-off between equity and efficiency in that average payoffs are larger under Boston than under Deferred Acceptance.

Protecting Unsophisticated Applicants in School Choice through Information Disclosure

“…In a parallel paper [Basteck and Mantovani, 2016], we report experimental evidence confirming that-absent detailed information on previous applications-BOS increases the gap between subjects of different cognitive ability compared to DA. Subjects of higher ability fare better than their peers of lower ability: because they are less able to identify optimal strategies in BOS, the latter earn significantly less and are over-represented at the worst school, resulting in ability segregation across schools.…”

“…The decision environment and part of the treatments are borrowed from Basteck and Mantovani [2016]. We briefly summarize them, together with the presentation of the novel treatments, in this section.…”

“…We briefly summarize them, together with the presentation of the novel treatments, in this section. We refer to Basteck and Mantovani [2016] for a more detailed discussion of the common parts.…”

“…Students that do not manipulate their first choice when they should, have a low chance of being admitted in the first round, and have to compete for the possibly few remaining seats in further ones, while they could have secured a seat at their second preferred school. As documented in Basteck and Mantovani [2016], subjects of lower cognitive ability are more prone to all of these mistakes, as well as to disadvantageous manipulation of the first choice-i.e. over-cautiousness.…”

Strategy-Proofness of Stochastic Assignment Mechanisms

“…For intermediate levels, mechanisms become key if the dominant strategy is easier to see than in others. In a related paper, Basteck and Mantovani (2016) find that subjects with a low cognitive ability play the dominant strategy less frequently in the deferred acceptance algorithm than high-ability subjects. The relation between the individuals' ability for contingent reasoning and their cognitive ability in matching markets remains an open question.…”