Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/146172 
Year of Publication: 
2016
Series/Report no.: 
SFB 649 Discussion Paper No. 2016-003
Publisher: 
Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk, Berlin
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 the 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.
Subjects: 
college admissions
incomplete information
student welfare
contests
all-pay auctions
experiment
JEL: 
C78
D47
D78
I21
Document Type: 
Working Paper

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