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Information acquisition and provision in school choice: a theoretical investigation

Author

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  • Yan Chen

    (University of Michigan)

  • YingHua He

    (Rice University)

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.

Suggested Citation

  • Yan Chen & YingHua He, 2022. "Information acquisition and provision in school choice: a theoretical investigation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(1), pages 293-327, July.
    • Handle: RePEc:spr:joecth:v:74:y:2022:i:1:d:10.1007_s00199-021-01376-3
    DOI: 10.1007/s00199-021-01376-3
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    More about this item

    Keywords

    Information acquisition; Information provision; School choice; Deferred Acceptance mechanism; Boston Immediate Acceptance mechanism;
    All these keywords.

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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