In 2012 Brazilian public universities were mandated to use affirmative action policies for candidates from racial and income minorities. We show that the policy makes the students' affirmative action status a strategic choice, and may reject high-achieving minority students while admitting low-achieving majority students. Empirical data shows evidence consistent with this type of unfairness in more than 49% of the programs. We propose a selection criterion and an incentive-compatible mechanism that, for a wider range of similar problems and the one in Brazil in particular, removes any gain from strategizing over the privileges claimed and is fair.
We test experimentally the Gale-Shapley Deferred Acceptance (DA) mechanism versus two versions of the Iterative Deferred Acceptance Mechanism (IDAM), in which students make applications one at a time. A significantly higher proportion of stable outcomes is reached under IDAM than under DA. The difference can be explained by a higher proportion of subjects following an equilibrium truthful strategy under iterative mechanisms than the dominant strategy of truthful reporting under DA. We associate the benefits of iterative mechanisms with the feedback on the outcome of the previous application they provide to students between steps.
Many school districts have objectives regarding how students of different races, ethnicity or religious backgrounds should be distributed across schools. A growing literature in mechanism design is introducing school choice mechanisms that attempt to satisfy those requirements. We show that mechanisms based on the student-proposing deferred acceptance may fail to satisfy those objectives, but that by using instead the schoolproposing deferred acceptance together with a choice function used by the schools, which incorporates a preference for satisfying them, can optimally approximate the diversity objectives while still satisfying an appropriate fairness criterion. We provide analytical results which show that the proposed mechanism has a general ability to satisfy those objectives, as opposed to some currently proposed mechanisms, which may yield segregated assignments.
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