Abstract:

The college admission system of China has used a two-stage procedure to match high school seniors with colleges for decades. The first stage sends students' applications to colleges, with each student being sent to at most one college. The second stage assigns each college's applicants to its majors. It is remarkable that students who are unmatched in the second stage cannot send their applications to the other colleges in their rank-order lists, which incentivizes students to accept major transfer options to increase the chance of being matched. We study the current form of the two-stage procedure called Chinese Parallel Mechanism (CPM) and demonstrate its flaws. We propose an improvement called Rectified Parallel Mechanism (RPM) by combining the two stages of CPM into one stage. We conduct lab experiments to test our theory and quantify the differences between CPM and RPM. Experimental data show that the percentage of major transfer acceptance under RPM (63%) is significantly lower than that under CPM (97%), and RPM generates significantly fewer cases of justified envy than CPM does. We extend our analysis to an ongoing reform in the system.

About the Speaker

Jun Zhang is a professor of economics at Nanjing Audit University. His research interest is in microeconomic theory, game theory, and market design in particular. His papers are published in journals including American Economic Review, Journal of Economic Theory, Games and Economic Behavior, Economic Theory, Journal of Mathematical Economics. His research is supported by National Natural Science foundation of China.