University Selection Processes and Market Size: An Experimental Study

Abstract

The administrator of a university selection process is often faced with allocation problems such as identifying the most talented candidates to be placed into the most sought-after university/course. This occurs because too many applicants are competing for a limited number of seats and the difficulty in identifying the qualified and interested candidate to attend the course, makes the selection process very tedious and slow. Although the selection process plays a role as a clearinghouse in allocation, the market congestion that occurred due to a large number of applications renders the process inefficient. The paper begins with the aim of studying three matching mechanisms; the Immediate Acceptance Mechanism (IAM), Deferred Acceptance Mechanism (DAM) and Efficient Transfer Mechanism (ETM), in terms of their truth-telling and stability properties in two market sizes. The parameter market size represented market congestion (i.e. a small market) and no market congestion (i.e. a large market). We find theImmediate Acceptance Mechanism lost to Deferred Acceptance and Efficient Transfer Mechanisms in terms of allocation and truth-telling; candidates in Immediate Acceptance Mechanism misreported their true preferences more to gain entry, which also rendered the mechanism less stable compared to the other two. A selection process should promote fairness in evaluation to encourage truth-telling which was found to be positively correlated with stability in allocation.