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Field
Abstract
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Before
In countries with centralized admission systems, some applicants have access to outside options. This study aims to analyze how the presence of outside options for some applicants affects the decisions of all applicants in a centralized admission system under the deferred acceptance (DA) mechanism. I consider two cases: 1) when the length of the ranked ordered list (ROL) of educational programs that applicants can submit is unconstrained, and 2) the case of constrained ROLs. For each of these cases, I also examine whether integrating the outside option into the centralized admissions system affects the decisions of applicants, as well as the characteristics of the resulting matchings.
Preliminary results are as follows. I find that, consistent with theoretical predictions, when the length of ROLs is constrained and the outside option is not integrated into the admissions system, participants without access to the outside option adopt a more cautious application strategy compared to those with such access, and are less inclined to truthfully list their top-ranked choice. However, contrary to theory, the incorporation of outside options into the system significantly alters the strategies and matching outcomes of the participants, even if the aftermarket is frictionless when the outside option is not integrated.
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After
In countries with centralized admission systems, some applicants have access to outside options. This study aims to analyze how the presence of attractive outside options for some applicants affects the decisions of all applicants in a centralized admission system under the deferred acceptance (DA) mechanism. I consider two cases: 1) when the length of the ranked ordered list (ROL) of educational programs that applicants can submit is unconstrained, and 2) the case of constrained ROLs. For each of these cases, I also examine whether integrating the outside option into the centralized admissions system affects the decisions of applicants, as well as the characteristics of the resulting matchings.
The preliminary findings are as follows. When the length of ROLs is constrained, contrary to the theoretical prediction, participants without access to the outside option do not take into account the information that other participants have access to the outside option, regardless of the share of such participants and whether or not the outside option is integrated into the admissions system. However, when the length of ROLs is constrained and the outside option is not integrated, as predicted by theory, participants with access to the outside option adopt a more ambitious application strategy compared to those without such access and are more inclined to truthfully list their top-ranked choice. Additionally, contrary to theory, integrating outside options into the system significantly alters the strategies and matching outcomes of the participants, even if the aftermarket is frictionless when the outside option is not integrated.
Additional experimental sessions are currently underway to collect more data.
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