Affirmative action in school choice: A new solution

Affirmative action policies are widely used in the school choice programs in many countries. However, the perverse comparative statistics of affirmative action policies for the minority students, the purported beneficiaries, has been shown to be a quite common phenomenon by recent studies. Doğan (2016) recently analyzes this issue in the deferred acceptance algorithm with minority reserves, advocated by Hafalir et al. (2013) as an alternative approach of implementing affirmative action in practice. Following Doğan (2016), we propose a new mechanism to solve this problem utilizing the concept of under-demanded schools and show further, how this method recovers the efficiency losses in the original mechanism.