Research Design Meets Market Design: Using Centralized Assignment for Impact Evaluation

A growing number of school districts use centralized assignment mechanisms to allocate school seats in a manner that reflects student preferences and school priorities. Many of these assignment schemes use lotteries to ration seats when schools are oversubscribed. The resulting random assignment opens the door to credible quasi-experimental research designs for the evaluation of school effectiveness. Yet the question of how best to separate the lottery-generated variation integral to such designs from non-random preferences and priorities remains open. This paper develops easily-implemented empirical strategies that fully exploit the random assignment embedded in a wide class of mechanisms, while also revealing why seats are randomized at one school but not another. We use these methods to evaluate charter schools in Denver, one of a growing number of districts that combine charter and traditional public schools in a unified assignment system. The resulting estimates show large achievement gains from charter school attendance. Our approach generates efficiency gains over ad hoc methods, such as those that focus on schools ranked first, while also identifying a more representative average causal effect. We also show how to use centralized assignment mechanisms to identify causal effects in models with multiple school sectors

Breaking Ties: Regression Discontinuity Design Meets Market Design

Many schools in large urban districts have more applicants than seats. Centralized school assignment algorithms ration seats at over-subscribed schools using randomly assigned lottery numbers, non-lottery tie-breakers like test scores, or both. The New York City public high school match illustrates the latter, using test scores and other criteria to rank applicants at \screened” schools, combined with lottery tie-breaking at unscreened \lottery” schools. We show how to identify causal effects of school attendance in such settings. Our approach generalizes regression discontinuity methods to allow for multiple treatments and multiple running variables, some of which are randomly assigned. The key to this generalization is a local propensity score that quantifies the school assignment probabilities induced by lottery and non-lottery tie-breakers. The local propensity score is applied in an empirical assessment of the predictive value of New York City’s school report cards. Schools that receive a high grade indeed improve SAT math scores and increase graduation rates, though by much less than OLS estimates suggest. Selection bias in OLS estimates is egregious for screened schools

Truthful Facility Assignment with Resource Augmentation: An Exact Analysis of Serial Dictatorship

We study the truthful facility assignment problem, where a set of agents with private most-preferred points on a metric space are assigned to facilities that lie on the metric space, under capacity constraints on the facilities. The goal is to produce such an assignment that minimizes the social cost, i.e., the total distance between the most-preferred points of the agents and their corresponding facilities in the assignment, under the constraint of truthfulness, which ensures that agents do not misreport their most-preferred points. We propose a resource augmentation framework, where a truthful mechanism is evaluated by its worst-case performance on an instance with enhanced facility capacities against the optimal mechanism on the same instance with the original capacities. We study a very well-known mechanism, Serial Dictatorship, and provide an exact analysis of its performance. Although Serial Dictatorship is a purely combinatorial mechanism, our analysis uses linear programming; a linear program expresses its greedy nature as well as the structure of the input, and finds the input instance that enforces the mechanism have its worst-case performance. Bounding the objective of the linear program using duality arguments allows us to compute tight bounds on the approximation ratio. Among other results, we prove that Serial Dictatorship has approximation ratio $g/(g-2)$ when the capacities are multiplied by any integer $g \geq 3$. Our results suggest that even a limited augmentation of the resources can have wondrous effects on the performance of the mechanism and in particular, the approximation ratio goes to 1 as the augmentation factor becomes large. We complement our results with bounds on the approximation ratio of Random Serial Dictatorship, the randomized version of Serial Dictatorship, when there is no resource augmentation

The Mechanism Design Approach to Student Assignment

The mechanism design approach to student assignment involves the theoretical, empirical, and experimental study of systems used to allocate students into schools around the world. Recent practical experience designing systems for student assignment has raised new theoretical questions for the theory of matching and assignment. This article reviews some of this recent literature, highlighting how issues from the field motivated theoretical developments and emphasizing how the dialogue may be a road map for other areas of applied mechanism design. Finally, it concludes with some open questions.National Science Foundation (U.S.

Matching with couples: a Multidisciplinary Survey

This survey deals with two-sided matching markets where one set of agents (workers/residents) has to be matched with another set of agents (firms/hospitals). We first give a short overview of a selection of classical results. Then, we review recent contributions to a complex and representative case of matching with complementarities, namely matching markets with couples. We discuss contributions from computer scientists, economists, and game theorists. © 2013 World Scientific Publishing Company

Manipulation Strategies for the Rank Maximal Matching Problem

We consider manipulation strategies for the rank-maximal matching problem. In the rank-maximal matching problem we are given a bipartite graph $G = (A \cup P, E)$ such that $A$ denotes a set of applicants and $P$ a set of posts. Each applicant $a \in A$ has a preference list over the set of his neighbours in $G$, possibly involving ties. Preference lists are represented by ranks on the edges - an edge $(a,p)$ has rank $i$, denoted as $rank(a,p)=i$, if post $p$ belongs to one of $a$'s $i$-th choices. A rank-maximal matching is one in which the maximum number of applicants is matched to their rank one posts and subject to this condition, the maximum number of applicants is matched to their rank two posts, and so on. A rank-maximal matching can be computed in $O(\min(c \sqrt{n},n) m)$ time, where $n$ denotes the number of applicants, $m$ the number of edges and $c$ the maximum rank of an edge in an optimal solution. A central authority matches applicants to posts. It does so using one of the rank-maximal matchings. Since there may be more than one rank- maximal matching of $G$, we assume that the central authority chooses any one of them randomly. Let $a_1$ be a manipulative applicant, who knows the preference lists of all the other applicants and wants to falsify his preference list so that he has a chance of getting better posts than if he were truthful. In the first problem addressed in this paper the manipulative applicant $a_1$ wants to ensure that he is never matched to any post worse than the most preferred among those of rank greater than one and obtainable when he is truthful. In the second problem the manipulator wants to construct such a preference list that the worst post he can become matched to by the central authority is best possible or in other words, $a_1$ wants to minimize the maximal rank of a post he can become matched to

Games with capacity manipulation: Incentives and Nash equilibria

Studying the interactions between preference and capacity manipulation in matching markets, we prove that acyclicity is a necessary and sufficient condition that guarantees the stability of a Nash equilibrium and the strategy-proofness of truthful capacity revelation under the hospital-optimal and intern-optimal stable rules. We then introduce generalized games of manipulation in which hospitals move first and state their capacities, and interns are subsequently assigned to hospitals using a sequential mechanism. In this setting, we first consider stable revelation mechanisms and introduce conditions guaranteeing the stability of the outcome. Next, we prove that every stable non-revelation mechanism leads to unstable allocations, unless restrictions on the preferences of the agents are introduced