Does disappointment aversion explain non-truthful reporting in strategy-proof mechanisms?

Experimental Economics, vol. 27, pp. 1184–1210

Abstract

Abstract Disappointment aversion has been suggested as an explanation for non-truthful rankings in strategy-proof school-choice matching mechanisms. We test this hypothesis using a novel experimental design that eliminates important alternative causes of non-truthful rankings. The design uses a simple contingent choice task with only two possible outcomes. Between two treatments, we manipulate the possibility for disappointment aversion to have an effect on ranking. We find a small and statistically marginally significant treatment effect in the direction predicted by disappointment aversion. We therefore conclude that disappointment aversion is a minor contributor to non-truthful rankings in strategy-proof school-choice matching mechanisms.

Authors 4

1. Roy Chen corresponding Aachen School of Business and Economics

   RWTH Aachen University

   Affiliation as printed

   School of Business and Economics, RWTH Aachen University, Templergraben 64, Aachen 52064, Germany

2. Peter Katuščák corresponding Aachen School of Business and Economics

   RWTH Aachen University

   Affiliation as printed

   School of Business and Economics, RWTH Aachen University, Templergraben 64, Aachen 52064, Germany

3. Thomas Kittsteiner corresponding Aachen School of Business and Economics

   RWTH Aachen University

   Affiliation as printed

   School of Business and Economics, RWTH Aachen University, Templergraben 64, Aachen 52064, Germany

4. Katharina Kütter corresponding Aachen School of Business and Economics

   RWTH Aachen University

   Affiliation as printed

   School of Business and Economics, RWTH Aachen University, Templergraben 64, Aachen 52064, Germany