Gaming the Boston School Choice Mechanism in Beijing

The Boston mechanism is criticized for its poor incentive and welfare performance compared with the Gale-Shapley deferred-acceptance mechanism (DA). Using school choice data from Beijing, I investigate parents' behavior under the Boston mechanism, taking into account parents' possible mistakes when they strategize. Evidence shows that parents are overcautious as they play "safe" strategies too often. There is no evidence showing that wealthier and more-educated parents are any more adept at strategizing. If others behave as in the data, an average naive parent who is always truth-telling experiences a utility loss in switching from the Boston to the DA, equivalent to an 8% increase in the distance from home to school or substituting a 13% chance at the best school with an equal chance at the second best. She has a 27% chance to be better off and a 55% chance being worse off. If instead parents are either sophisticated (always playing a best response against others) or naive, results are mixed: Under the DA, naive ones enjoy a utility gain on average when less than 80% of the population is naive, while still about 42% worse off and only 39% better off. Sophisticated parents always loose more.