School Choice with Transferable Students Characteristics

Abstract

We consider school choice problems where school priorities depend on transfer-able student characteristics. In this framework, the tradeoff between efficiency and stability can be alleviated by forming fair Pareto improvements where a group of students may improve their assignment to schools by exchanging their positions and transferable characteristics at the schools they are initially assigned to without generating justified envy for the remaining students. We define the student exchange with transferable characteristics (SETC) class of algorithms. Every algorithm in the SETC class starts from an initial matching of students to schools and an initial allocation of transferable characteristics and proposes a sequence of fair Pareto improvements, until the point at which an additional efficiency gain implies a violation of the school priorities that cannot be solved with a reallocation of transferable characteristics.