The literature on school choice assumes that families can submit a preference list over all the schools they want to be assigned to. However, in many real-life instances families are only allowed to submit a list containing a limited number of schools. Subjects' incentives are drastically affected, as more individuals manipulate their preferentes. Including a safety school in the constrained list explains most manipulations. Competitiveness across schools play an important role. Constraining choices increases segregation and affects the stability and efficiency of the final allocation. Remarkably, the constraint reduces significantly the proportion of subjects playing a dominated strategy.JEL classification: C72, C78, D78, I20

Changes in total surplus and deadweight loss are traditional measures of economic welfare. We propose necessary and sufficient conditions for rationalizing consumer demand data with a quasilinear utility function. Under these conditions, consumer surplus is a valid measure of consumer welfare. For nonmarketed goods, we propose necessary and sufficient conditions on market data for efficient production , i.e. production at minimum cost. Under these conditions we derive a cost function for the nonmarketed good, where producer surplus is the area above the marginal cost curve.

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In the psychology literature, "choking under pressure" refers to a behavioural response to an increase in the stakes. In a natural experiment, we study the gender difference in performance resulting from changes in stakes. We use detailed information on the performance of high-school students and exploit the variation in the stakes of tests, which range from 5% to 27% of the final grade. We find that female students outperform male students relatively more when the stakes are low. The gender gap disappears in tests taken at the end of high school, which count for 50% of the university entry grade.

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The Boston mechanism is a school allocation procedure that is widely used around the world and has been criticized for its incentive problems. In order to resolve overdemands for a given school, most often priority is given to families living in the neighborhood of the school. Using a very rich data set on school applications for the case of the Boston mechanism in Barcelona, we exploit an unexpected change in the definition of neighborhood. This change allows us to identify that a large fraction of families systematically ranks first high priority schools, neighborhood schools in this case. Additional data on school enrollment decisions and census data shows that some seemingly unsophisticated parents are high income families that can rank hard-to-get schools because they can afford the outside option of a private school in case they do not get in. This sheds light on important inequalities beyond parents' lack of sophistication found in the literature.

We model household choice of schools under the Boston mechanism (BM) and develop a new method, applicable to a broad class of mechanisms, to fully solve the choice problem even if it is infeasible via the traditional method. We estimate the joint distribution of household preferences and sophistication types, using administrative data from Barcelona. Counterfactual policy analyses show that a change from BM in Barcelona to the deferred-acceptance mechanism would decrease average welfare by €1,020, while a change to the top-trading-cycles mechanism would increase average welfare by €460. We thank Yuseob Lee for excellent research assistance. We thank the editor and five anonymous referees for their suggestions. We thank the staff at the Institut d'Estadística de Catalunya, especially Miquel Delgado, for their help in processing the data. We thank Steven Durlauf, Jeremy Fox, Amit Gandhi, John Kennan, and Chris Taber for insightful discussions.

Welfare economics, Quasilinear utilities, Homothetic utilities, Nonmarketed goods, Afriat inequalities, D11, D12, D21, D60,