Cognitive ability in matching with strategic uncertainty: An experimental study

• Published in: China economic review Vol. 88; p. 102295
• Main Authors: Hu, Xinquan, Yao, Lan
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01.12.2024
• Subjects: Cognitive ability; Laboratory experiment; School choice; Strategyproofness; School choice; C78; D47; Strategyproofness; Cognitive ability; C91; Laboratory experiment; D82
• ISSN: 1043-951X
• DOI: 10.1016/j.chieco.2024.102295

Strategyproof mechanisms have become the predominant choice for educational institutions. However, both laboratory experiments and empirical evidence highlight the persistent occurrence of strategic misreporting, leading to adverse consequences. This underscores the need to examine the reporting strategies of students, particularly those with varying cognitive abilities, across different decision environments. We present an experimental comprehension test of reporting strategies using computerized opponents to precisely control the levels of strategic uncertainty. The results reveal that removing strategic uncertainty does not significantly affect truth-telling rates. However, subjects with median cognitive ability are more truthful under strategic uncertainty, especially when information is incomplete. Additionally, providing information about priorities has a negative and significant impact on truth-telling rates. The findings of this research demonstrate that constructing a simplified market environment using computerized agents and providing relevant feedback to students can effectively enhance their understanding of the matching mechanism and nudge them to make optimal strategy choices. •Subjects react to theoretically irrelevant changes in the environment.•Providing additional information on school priorities significantly decreases the rate of truth-telling.•Compared to situations without strategic uncertainty, subjects with median cognitive ability tend to be more truthful when confronted with strategic uncertainty.•The median cognitive ability subjects behave differently from the low or high cognitive ability subjects.