Wednesday, 25 August, 2010 | 07:00 | Defense

Ondřej Knot: “Essays in Applied Microeconomics: School Admission Mechanism and Corporate Bankruptcy”

Dissertation Committee:
Gérard Roland (chair)
Evžen Kočenda (local chair)
Lubomír Lízal
Libor Dušek



In my dissertation, I address two topics in applied microeconomics. First two chapters deal with the functioning of school admission mechanisms and their affects on student school choice behavior. Third chapter deals with the question of optimal bankruptcy law design.

Pupil-school matching mechanisms play a critical role in the schooling system. They affect the behavior of students and—through the information they convey—also the behavior of the schools and the authorities responsible for education policy. In the first chapter (joint with Daniel Münich), using a computational simulation model, we analyze the functioning of an admission scheme used in the Czech Republic as a prototype of decentralized, ability-based admission schemes widely used in the world to assign pupils to upper-secondary schools. Our findings show large incidence of strategic misrepresentation of school preferences among applicants, large differences between revealed and trued demand, and large incidence of justified envy in the resulting matching. We point out several implication this could have for functioning of schooling systems.

In the second chapter, I empirically study the behavior of students under the Czech pupil-school matching mechanism. Using district-level data on demand for public gymnasia, I find significant evidence that students do not apply to their most preferred schools, opting rather for a less-preferred, but safer option. Furthermore, using data on individual student school choices, I also find that students with weak socio-economic background misrepresent their preferences more often than other students.

In the third chapter (joint with Ondřej Vychodil), we develop a model of a debt contracting problem under bankruptcy regimes differing by a degree of softness. In the model, the degree of softness is associated with the extent to which the absolute priority rule can be violated. We show that when the degree of softness can be set individually for each project, then the debtor's tendency to excessive risk-taking can be eliminated and the first best solution can be attained. When it is given exogenously by a bankruptcy law, then a completely tough law results in a lower distortion from the first best than a soft law with a moderate degree of softness.

Full Text: “Essays in Applied Microeconomics: School Admission Mechanism and Corporate Bankruptcy” by Ondřej Knot