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Matching Allocation Problems with Endogenous Information Acquisition

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  • Bade, Sophie

Abstract

The paper introduces the assumption of costly information acquisition to the theory of mechanism design for matching allocation problems. It is shown that the assumption of endogenous information acquisition greatly changes some of the cherished results in that theory: in particular, the first-best might not be implementable. Moreover, it might not even be possible to implement the second-best through trade. In addition, the paper highlights the use of randomness in setting incentives for efficient learning. The trade-offs among simultaneous and sequential learning and among efficient learning and efficient allocations are discussed.

Suggested Citation

  • Bade, Sophie, 2011. "Matching Allocation Problems with Endogenous Information Acquisition," VfS Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48735, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc11:48735
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Serial Dictatorship; House Allocation Problems; Endogenous Information;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General

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