College admissions with entrance exams: Centralized versus decentralized
- Publication Type:
- Journal Article
- Journal of Economic Theory, 2018, 176 pp. 886 - 934
- Issue Date:
Files in This Item:
Copyright Clearance Process
- Recently Added
- In Progress
- Open Access
This item is currently unavailable due to the publisher's embargo.
The embargo period expires on 1 Jul 2020
© 2018 Elsevier Inc. 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.
Please use this identifier to cite or link to this item: