Abstract
In many two-sided matching markets institutions often use a quota of their seats to implement affirmative action. This paper shows how to use such quotas endogenously. In particular, we design a choice function which uses a seat to implement affirmative action if and only if it is necessary. It always chooses the most minority students and at the same time uses the smallest quota in a big domain of choice functions we characterize. It also explicitly shows the number of seats that are used for affirmative action in the matching outcome, which information is useful in evaluating the affect of affirmative action. We provide several applications.
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