Do you like me enough? The impact of restricting preferences ranking in a university matching process∗
Abstract: This paper studies, theoretically and empirically, the impact of imposing preferences-on-preferences (POP) within the context of a deferred-acceptance matching process with uncertainty. Theoretically, this type of rules make students misrepresent their preferences to secure a spot in a POP program, particularly when uncertainty is large. Applicants to Chilean universities responded as predicted by our model to a 2003 policy where one of the main university, UChile, imposed POP and then to a change in the entrance exam, increasing uncertainty. We show that not only were applications altered but eventual outcomes and welfare as well, particularly with higher uncertainty.