College admissions with entrance exams: Centralized versus decentralized

Isa Hafalir, Rustamdjan Hakimov, Dorothea Kübler and Morimitsu Kurino

Discussion Papers, Research Unit: Market Behavior from WZB Berlin Social Science Center

Abstract: We theoretically and experimentally study a college admissions problem in which colleges accept students by ranking students' efforts in entrance exams. Students hold private information regarding their ability level that affects the cost of their efforts. We assume that student preferences are homogeneous over colleges. By modeling college admissions as contests, we solve and compare the equilibria of "centralized college admissions" (CCA) in which students apply to all colleges, and "decentralized college admissions" (DCA) in which students can only apply to one college. We show that lower ability students prefer DCA whereas higher ability students prefer CCA. The main qualitative predictions of the theory are supported by the experimental data, yet we find a number of behavioral differences between the mechanisms 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: 2014
New Economics Papers: this item is included in nep-cta, nep-edu, nep-exp and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Journal Article: College admissions with entrance exams: Centralized versus decentralized (2018)
Journal Article: College admissions with entrance exams: Centralized versus decentralized (2018)
Working Paper: College admissions with entrance exams: Centralized versus decentralized (2016)
Working Paper: College Admissions with Entrance Exams: Centralized versus Decentralized
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wzbmbh:spii2014208

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