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COLLEGE ADMISSIONS AND THE STABILITY OF MARRIAGE
By D. Gale and L. S. Shapley
Presented by Lucy Chang, Allison Jaros, Erin Lett, and Morgan Lucas (Coase Team)
February 28, 2012
I. Introduction
Gale and Shapley focused on a common problem faced by colleges based on their usual
admissions procedure—namely, how to admit the ideal number of best-qualified applicants
based on a specific quota without knowing precisely how many admitted applicants will accept.
For example, the authors note the college may not know whether the applicant has applied
elsewhere and, if so, how she ranked the colleges or whether the other colleges will admit her.
As such, the college can likely only admit applicants of a number and quality that are
“reasonably close” to their ideal.
The decentralized application process precludes coordination by colleges and students. Colleges
cannot compare information on students to ascertain the likelihood that an applicant truly prefers
their school to all others. Therefore, they must gamble on how many of their top applicants will
ultimately decide to attend their college. To achieve their ideal class size, colleges are forced to
estimate a certain level of over-admittance, which may result in class sizes that are too large.
This creates a welfare loss to the college because they must expend resources to support a class
that is too big. Further, there is a chance that, to comfortably estimate their ideal size, there will
be a slight loss in student quality depending on the quality of the applicant pool. There is also a
welfare loss to students: Had student preferences been perfectly known, some students may have
been able to gain admission to a preferred college based on the fact that other students preferred
to go elsewhere.
In response to this problem, colleges may use wait lists or ask applicants to list all colleges to
which
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