Events at CERGE-EI

Laure Goursat

Sciences Po, France

Abstract: This paper considers a matching market where agents with privately known priority scores apply to acquire one good. The analysis characterizes the Bayes-Nash equilibria, computes welfare ex-ante and interim, and discusses implications for market design. Three main findings emerge. First, the symmetric equilibrium necessarily involves randomization between applications. Second, it exhibits a block structure: agents sort into a finite number of classes of neighboring scores where they use the same strategy. Third, the intermediate-score agents bear most of the inefficiencies, whereas the low-score agents may be better off under private information than under public information. In total, private information mitigates priority-based discrimination.

Full Text: Whether and where to apply? Information and Discrimination in Matching with Priority Scores