UNDERSTANDING PREFERENCE FORMATION IN A MATCHING MARKET *

We analyze the role of formal and informal information gathering in students ' preference formation. We analyzed this role in the college admission process using Spanish individual data. We introduce students ' risk aversion and information costs on the standard college admission problem. Then, we model the students ' list formation as a two-stage procedure. In first stage, students must decide whether they gather information or not about a college. In the second stage, they give their preferred list to the matching office. The observed changes in preferences suggest that information gathering is important in the last two months of the process and that students with less ex-ante information are more affected by these changes