Abstract
When participating in school choice, students may incur information acquisition costs to learn about school quality. This paper investigates how two popular school choice mechanisms, the (Boston) Immediate Acceptance and the Deferred Acceptance, incentivize students’ information acquisition. Specifically, we show that only the Immediate Acceptance mechanism incentivizes students to learn their own cardinal and others’ preferences. We demonstrate that information acquisition costs affect the efficiency of each mechanism and the welfare ranking between the two. In the case where everyone has the same ordinal preferences, we evaluate the welfare effects of various information provision policies by education authorities.
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Financial support from IFREE and the National Science Foundation through Grant No. SES-0962492 to Chen and Grant No. SES-1730636 to He and from the French National Research Agency (l’Agence Nationale de la Recherche) through Projects DesignEdu (ANR-14-CE30-0004) and FDA (ANR-14-FRAL-0005) to He is gratefully acknowledged.
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Chen, Y., He, Y. Information acquisition and provision in school choice: a theoretical investigation. Econ Theory 74, 293–327 (2022). https://doi.org/10.1007/s00199-021-01376-3
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DOI: https://doi.org/10.1007/s00199-021-01376-3
Keywords
- Information acquisition
- Information provision
- School choice
- Deferred Acceptance mechanism
- Boston Immediate Acceptance mechanism