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Aftermarket Frictions and the Cost of Off-Platform Options in Centralized Assignment Mechanisms

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  • Adam Kapor
  • Mohit Karnani
  • Christopher Neilson

Abstract

We study the welfare and human capital impacts of colleges’ (non)participation in Chile’s centralized higher-education platform, leveraging administrative data and two policy changes: the introduction of a large scholarship program and the inclusion of additional institutions, which raised the number of on-platform slots by approximately 40%. We first show that the expansion of the platform raised on-time graduation rates. We then develop and estimate a model of college applications, offers, wait lists, matriculation, and graduation. When the platform expands, welfare increases, and welfare, enrollment, and graduation rates are less sensitive to off-platform frictions. Gains are larger for students from lower-socioeconomic-status backgrounds.

Suggested Citation

  • Adam Kapor & Mohit Karnani & Christopher Neilson, 2024. "Aftermarket Frictions and the Cost of Off-Platform Options in Centralized Assignment Mechanisms," Journal of Political Economy, University of Chicago Press, vol. 132(7), pages 2346-2395.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/729068
    DOI: 10.1086/729068
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    Cited by:

    1. Tincani, Michela M. & Kosse, Fabian & Miglino, Enrico, 2022. "The Effect of Preferential Admissions on the College Participation of Disadvantaged Students: The Role of Pre-College Choices," Rationality and Competition Discussion Paper Series 342, CRC TRR 190 Rationality and Competition.
    2. Akbarpour, Mohammad & Kapor, Adam & Neilson, Christopher & van Dijk, Winnie & Zimmerman, Seth, 2022. "Centralized School choice with unequal outside options," Journal of Public Economics, Elsevier, vol. 210(C).
    3. Machado, Cecilia & Szerman, Christiane, 2021. "Centralized college admissions and student composition," Economics of Education Review, Elsevier, vol. 85(C).
    4. Olivier de Groote & Anaïs Fabre & Margaux Luflade & Arnaud Maurel, 2025. "Sequential College Admission Mechanisms and Off-Platform Options," Working Papers hal-05212878, HAL.
    5. Michela Tincani & Fabian Kosse & Enrico Miglino, 2022. "The Effect of Preferential Admissions on the College Participation of Disadvantaged Students: The Role of Pre-College Choices," Working Papers 2022-034, Human Capital and Economic Opportunity Working Group.
    6. Nikhil Agarwal & Eric Budish, 2021. "Market Design," NBER Working Papers 29367, National Bureau of Economic Research, Inc.
    7. Mariana Laverde & Elton Mykerezi & Aaron Sojourner & Aradhya Sood, 2023. "Gains from Reassignment: Evidence from A Two-Sided Teacher Market," Upjohn Working Papers 23-392, W.E. Upjohn Institute for Employment Research.
    8. Tom‡s Larroucau & Ignacio A. Rios & Ana•s Fabre & Christopher Neilson, 2025. "College Application Mistakes and the Design of Information Policies at Scale," Cowles Foundation Discussion Papers 2461, Cowles Foundation for Research in Economics, Yale University.
    9. Tincani, Michela M. & Kosse, Fabian & Miglino, Enrico, 2022. "The Effect of Preferential Admissions on the College Participation of Disadvantaged Students: The Role of Pre-College Choices," IZA Discussion Papers 15633, Institute of Labor Economics (IZA).
    10. Michela Maria Tincani & Fabian Kosse & Enrico Miglino, 2022. "The Effect of Preferential Admissions on the College Participation of Disadvantaged Students: The Role of Pre-College Choices," CESifo Working Paper Series 10020, CESifo.

    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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