Who Gets the Bonus?
Research Seminars: Virtual Market Design SeminarHigh School Admission Reforms in China
China implements reforms to improve access to quality education for students from underperforming schools by awarding bonus-points to a select group of students. Such privilege systems are hybrids between reserve-based and priority-based systems. They provide administrators with “filtering flexibility”. The paper presented in this Virtual Market Design Seminar reveals significant flaws in practice due to challenges in distribution of bonuses. The authors search for ideal privilege systems and propose choice rule that “endogenously” identifies bonus-recipients. This is the unique acceptant and fair rule efficiently assigning bonuses. Embedded in the deferred acceptance, it ensures stability, strategy-proofness, and constrained-optimality. Empirical analysis shows that this proposal significantly improves representation for underperforming schools.
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