How Game Theory Fixed NYC’s High School Application Process
In New York City, eighth grade students have to go through a series of tests and applications to get placed in a public high school. In the past, this process had been very difficult and selective, and oftentimes left students not getting placed in any of the schools the preferred. To solve this problem, three economists worked to create a solution. They used game theory to develop a “deferred acceptance algorithm”. The key feature was mutuality, where the student put their preferences for schools, and the schools put their preferences for students, and they were matched based on mutual preference. Below is a simplified example of how this works, with students only choosing three schools. This process then allows more students to be matched with one of their preferred schools, thus starting to fix the problem.
This relates to what we learned in class because of how it relates to game theory. We talked about game theory and how to find the best responses for both players in the game, or the Nash equilibrium. In this case the best responses are the pairings that give both the school and the student the highest ranking choice they have. This process has allowed the number of unmatched students to go from around 31,000 to 3,00, which means that it has not fully fixed the problem but is a vast improvement.
