An increasingly popular practice for student assignment to public schools in the United States is the use of school choice systems. The celebrated Gale-Shapley student-optimal stable mechanism (SOSM) has recently replaced two deficient student assignment mechanisms that were in use in New York City and Boston. We provide theoretical evidence that the SOSM outcome may produce large welfare losses. Then we propose an efficiency-adjusted deferred acceptance mechanism (EADAM) that allows a student to consent to waive a certain priority that has no effect on his or her assignment. Under EADAM, consenting students cause themselves no harm, but may help many others benefit as a consequence. We show that EADAM can recover any welfare losses due to SOSM while also preserving immunity against strategic behavior in a particular way. It is also possible to use EADAM to eliminate welfare losses due to randomly breaking ties in student priorities. (c) 2010 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology..

Each year approximately 10 million high school seniors in China compete for 6 million seats through a centralized college admissions system. Within the last decade, many provinces have transitioned from a "sequential" to a "parallel" mechanism to make their admissions decisions. In this study, we characterize a parametric family of application-rejection assignment mechanisms, including the sequential, deferred acceptance, and parallel mechanisms in a nested framework. We show that all of the provinces that have abandoned the sequential mechanism have moved toward less manipulable and more stable mechanisms. We also show that existing empirical evidence is consistent with our theoretical predictions.