Can the university matching mechanism in Malaysia do better? An experimental evaluation of three matching mechanisms

Abstract

In Malaysia, the Immediate Acceptance Mechanism (IAM) is used to match the preferences of eligible students to the limited places available in public universities every year. Preference manipulation by students often results in places being offered to less academically qualified applicants over their better-qualified counterparts. We conducted laboratory experiments to evaluate the performance of IAM with two other popular mechanisms for centralized college admissions: the deferred acceptance mechanism (DAM), and the top trading cycle mechanism (TTC). In doing so, we broadened existing research by incorporating two features. First, we assumed a competitive environment with excess demand for college seats, as is the case in Malaysia. Second, we examined the impact of offering different amounts of information varying from just the stated minimum entry requirements (as is the current practice in Malaysia) to giving additional information on the number of seats available and the past average grades used to admit students in each university. Incorporating excess demand departs from the existing literature that has explored only examples where the student-seat ratio is 1:1, or very close to it. Our results suggest that in the prevailing Malaysian situation the DAM will perform better than the IAM because students are likely to express their true preferences which also increases its matching stability. However, if the availability of places in private universities results in a less congested market, either the DAM or TTC will perform better-provided students are given information on the number of places available and the minimum entry requirements of each university.

Keywords:

• Competition
• information
• market matching
• stability
• truth-telling

JEL Codes:

• C78
• C92
• D78
• I20

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

The research was funded by Universiti Sains Malaysia. Grant number 1001.PSOSIAL.8016067.

Notes on contributors

Ooi Tze Wei

Dr Ooi Tze Wei ran the experiment, prepared the experimental programs and analysed the data.

Ch’ng Kean-Siang

Dr Ch’ng Kean-Siang started the idea with applying the matching mechanisms in local University intake system, conducted analysis of the data collected and ran the experiment with Dr Ooi.

Suresh Narayanan

Dr Suresh Narayanan analysed the data and overall structure of the paper.