Abstract
This paper first shows that when colleges' preferences are substitutable there does not exist any stable matching mechanism that makes truthful revelation of preferences a dominant strategy for every student. The paper introduces student types and captures colleges' preferences for affirmative action via type-specific quotas: A college always prefers a set of students that respects its type-specific quotas to another set that violates them. Then it shows that the student-applying deferred acceptance mechanism makes truthful revelation of preferences a dominant strategy for every student if each college's preferences satisfy responsiveness over acceptable sets of students that respect its type-specific quotas. These results have direct policy implications in several entry-level labor markets (Roth 1991). Furthermore, a fairness notion and the related incentive theory developed here is applied to controlled choice in the context of public school choice by Abdulkadiroğlu and Sönmez (2003).
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I am grateful to two anonymous referees and the editor, whose comments significantly enhanced the exposition of the paper. I am also thankful to Al Roth for his valuable feedback. I would also like to thank Ron Jones, Bahar Leventoğlu, Paul Milgrom, Tayfun Sönmez and seminar participants at Caltech, Duke University, University of Montreal, University of Rochester, Stanford Institute for Theoretical Economics (SITE) Summer Workshop, SUNY Albany, and Yale University for their helpful comments. I gratefully acknowledge Alfred P. Sloan Foundation research fellowship and NSF CAREER Award SES-04-49946.
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Abdulkadiroğlu, A. College admissions with affirmative action. Int J Game Theory 33, 535–549 (2005). https://doi.org/10.1007/s00182-005-0215-7
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DOI: https://doi.org/10.1007/s00182-005-0215-7