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Comparing School Choice Mechanisms by Interim and Ex-Ante Welfare

Apr 2011
Working Paper
10-021
By  Peter Troyan
The Boston mechanism and deferred acceptance (DA) are two competing mechanisms widely used in school choice problems across the United States. Recent work has highlighted welfare gains from the use of the Boston mechanism, in particular finding that when cardinal utility is taken into account, Boston interim Pareto dominates DA in certain incomplete information environments with no school priorities. We show that these previous interim results are not robust to the introduction of nontrivial (weak) priorities. However, we partially restore the earlier results by showing that from an ex-ante utility perspective, the Boston mechanism once again Pareto dominates any strategyproof mechanism (including DA), even allowing for arbitrary priority structures. Thus, we suggest ex-ante Pareto dominance as a criterion by which to compare school choice mechanisms. This criterion may be of interest to school district leaders, as they can be thought of as social planners whose goal is to maximize the overall ex-ante welfare of the students. From a policy perspective, school districts may have justification for the use the Boston mechanism over a strategyproof alternative, even with nontrivial priority structures.