Preference respecting stable matchings in school choice problems

Official URL: http://risc01.sabanciuniv.edu/record=b1669293 (Table of Contents)

We introduce a new stability notion called preference respecting stability that incorporates tolerance values for schools and attaches importance to both the preferences of students and the priorities of schools, and study its properties. We find that a preference respecting stable allocation exists in any school choice problem, and it Pareto-dominates the Gale-Shapley stable allocation. We construct a two part mechanism that depends on improvement cycles to reach a constrained efficient preference respecting stable allocation. Our mechanism is a natural generalization of a broad class of mechanisms and admits the student-optimal Stable Mechanism and the Boston Mechanism as special cases. We also study its strategic properties under complete and incomplete information settings and find that truthful reporting of preferences is an ordinal Bayesian Nash equilibrium for the students.