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  5. Quota Adjustment Process

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Quota Adjustment Process

  • Taro Kumano
  • Morimitsu Kurino
American Economic Review (Forthcoming)

Abstract

In designing priority-based matching problems such as school choice, the quota of each school is, to some extent, a design variable. We define an ex-post student-optimal stable matching (ESOSM) as a matching that is stable at some implementable quota distribution and not Pareto dominated by any other stable matching among all implementable quota distributions. We propose a novel mechanism called a quota adjustment process (QAP) that improves existing stable mechanisms by endogenously finding an ESOSM and the corresponding optimal quota distribution for any preference relation. This method has been successfully implemented at the University of Tsukuba in Japan since 2021.

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