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College admissions with entrance exams: Centralized versus decentralized

Isa E. Hafalir, Rustamdjan Hakimov, Dorothea Kübler () and Morimitsu Kurino

Journal of Economic Theory, 2018, vol. 176, issue C, 886-934

Abstract: We study a college admissions problem in which colleges accept students by ranking students' efforts in entrance exams. Students' ability levels affect the cost of their efforts. We solve and compare equilibria of “centralized college admissions” (CCA) where students apply to all colleges and “decentralized college admissions” (DCA) where students only apply to one college. We show that lower ability students prefer DCA whereas higher ability students prefer CCA. Many predictions of the theory are supported by a lab experiment designed to test the theory, yet we find a number of differences that render DCA less attractive than CCA compared to the equilibrium benchmark.

Keywords: College admissions; Incomplete information; Student welfare; Contests; All-pay auctions; Experiment (search for similar items in EconPapers)
JEL-codes: C78 D47 D78 I21 (search for similar items in EconPapers)
Date: 2018
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Related works:
Working Paper: College Admissions with Entrance Exams: Centralized versus Decentralized (2016) Downloads
Working Paper: College admissions with entrance exams: Centralized versus decentralized (2014) Downloads
Working Paper: College Admissions with Entrance Exams: Centralized versus Decentralized Downloads
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