On the revealed preference analysis of stable aggregate matchings (with Thomas Demuynck)

Theoretical Economics, forthcoming

📃 Final version

Echenique, Lee, Shum, and Yenmez (2013) established the testable revealed preference restrictions for stable aggregate matching with transferable (TU) and non-transferable utility (NTU) and for extremal stable matchings. In this paper, we rephrase their restrictions in terms of properties on a corresponding bipartite graph. From this, we obtain a simple condition that verifies whether a given aggregate matching is rationalisable. For matchings that are not rationalisable, we provide a simple greedy algorithm that computes the minimum number of matches that needs to be removed to obtain a rationalisable matching. We also show that the related problem of finding the minimum number of types that we need to remove in order to obtain a rationalisable matching is NP-complete.

Affirmative actions: The Boston mechanism case (with M. O. Afacan)

Economics Letters, 2016, 141, 95-97

📃 Final version

We consider three popular affirmative action policies in school choice: quota-based, priority-based, and reserve-based affirmative actions. The Boston mechanism (BM) is responsive to the latter two policies in that a stronger priority-based or reserve-based affirmative action makes some minority student better off. However, a stronger quota-based affirmative action may yield a Pareto inferior outcome for the minority under the BM. These positive results disappear once we look for a stronger welfare consequence on the minority or focus on BM equilibrium outcomes.