Strategic Behavior in Multi-unit Assignment Problems

Résumé

This paper uses unusual data -- consisting of agents' strategically reported preferences as well as their underlying true preferences -- to study strategic behavior in the course-allocation mechanism used at Harvard Business School. We show that the mechanism is manipulable in theory, manipulated by students in practice, and that these manipulations cause meaningful welfare losses. However, we also find that ex-ante welfare is higher than under the random serial dictatorship, which is the only known mechanism that is anonymous, strategyproof and ex-post efficient. We trace the origin of this poor performance to that fact that the lucky students in RSD make their last choices independently of whether these courses would be some unlucky student's first choice.