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College Admissions with Entrance Exams: Centralized versus Decentralized

Author

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  • Isa E. Hafalir
  • Rustamdjan Hakimov
  • Dorothea Kübler
  • Morimitsu Kurino

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.

Suggested Citation

  • Isa E. Hafalir & Rustamdjan Hakimov & Dorothea Kübler & Morimitsu Kurino, 2016. "College Admissions with Entrance Exams: Centralized versus Decentralized," SFB 649 Discussion Papers SFB649DP2016-003, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  • Handle: RePEc:hum:wpaper:sfb649dp2016-003
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Magnac, Thierry, 2018. "Quels étudiants pour quelles universités ? Analyses empiriques de mécanismes d'allocation centralisée," TSE Working Papers 18-899, Toulouse School of Economics (TSE).
    2. Hakimov, Rustamdjan, 2016. "Contests at the workplace with and without prize selection: Testing theory in a field experiment," Discussion Papers, Research Unit: Market Behavior SP II 2016-211, WZB Berlin Social Science Center.
    3. Carvalho, José-Raimundo & Magnac, Thierry & Xiong, Qizhou, 2016. "College Choice and the Selection of Mechanisms: A Structural Empirical Analysis," IWH Discussion Papers 3/2016, Halle Institute for Economic Research (IWH).
    4. Yeon-Koo Che & Youngwoo Koh, 2016. "Decentralized College Admissions," Journal of Political Economy, University of Chicago Press, vol. 124(5), pages 1295-1338.
    5. Flip Klijn & Joana Pais & Marc Vorsatz, 2016. "Static versus Dynamic Deferred Acceptance in School Choice: Theory and Experiment," Working Papers 926, Barcelona Graduate School of Economics.
    6. Machado, Cecilia & Szerman, Christiane, 2016. "Centralized Admission and the Student-College Match," IZA Discussion Papers 10251, Institute for the Study of Labor (IZA).
    7. He, Yinghua & Magnac, Thierry, 2017. "A Pigouvian Approach to Congestion in Matching Markets," TSE Working Papers 17-870, Toulouse School of Economics (TSE).
    8. Carvalho, José-Raimundo & Magnac, Thierry, 2016. "Survey on aspiration and expectations of high school students," TSE Working Papers 16-627, Toulouse School of Economics (TSE).

    More about this item

    Keywords

    College admissions; incomplete information; student welfare; contests; all-pay auctions; experiment.;

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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