We present a model in which students can influence their priorities in a school choice mechanism through a first-stage contest. We show that efficiency improvements at the mechanism level can lead to net efficiency losses if they come at the price of increased allocative inequalities, intensifying competition in the contest. To demonstrate this potential tension, we apply these results to the deferred and immediate acceptance mechanisms (DA and IA) and show that there are conditions under which IA can yield higher net welfare than DA, despite allocative efficiency advantages of DA under these conditions.
Citation
Leo, G., \& Van der Linden, M. (2025). Complainer's dilemma. Journal of Public Economic Theory, 27(1), e70011.