Assignment mechanisms: Common preferences and information acquisition

Abstract

I study costly information acquisition in a two-sided matching problem, such as matching applicants to schools. An applicant's utility is a sum of common and idiosyncratic components. The idiosyncratic component is unknown to the applicant but can be learned at a cost. As applicants learn, their preferences over schools become more heterogeneous, improving match quality. In my stylized environment, too few applicants acquire information in an ordinal strategy-proof mechanism. Subsidies, disclosure of applicants' priorities, and affirmative action-like policies lead to higher information acquisition and Pareto improvements. Learning may also decrease when an ordinal strategy-proof mechanism r..