The Instability of Matching with Overcon dent Agents: Laboratory and Field Investigations

Many centralized college admissions markets allocate seats to students based on their performance on a standardized exam. A single exam's measurement error can cause the exam-based priorities to deviate from colleges' aptitude-based preferences. Previous literature proposes correcting such an error by combining pre-exam preference submission with a Boston algorithm. In a laboratory experiment, I nd that pre-exam preference submission is skewed by overcon dence, which leads to even more severe and more varied welfare distortions than the exam's measurement error alone. Moreover, the mechanism exhibits a tendency to reward overcon dence and punish undercon dence, thus serving as a gender penalty for women. I also analyze eld data from China and reach similar conclusions.