@article{0e7fa9a994ef429f98b776624f23d985,
title = "College admissions with entrance exams: Centralized versus decentralized",
abstract = "We study a college admissions problem in which colleges accept students by ranking students{\textquoteright} efforts in entrance exams. Students{\textquoteright} 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.",
keywords = "All-pay auctions, College admissions, Contests, Experiment, Incomplete information, Student welfare",
author = "Hafalir, {Isa E.} and Rustamdjan Hakimov and Dorothea K{\"u}bler and Morimitsu Kurino",
note = "Funding Information: We would like to thank Ken Binmore, Francis Bloch, Vincent Crawford, David Danz, Aytek Erdil, Youngwoo Koh, Fuhito Kojima, Kai A. Konrad, Vijay Krishna, Benny Moldavanu, Ariel Rubinstein, Aner Sela, Ron Siegel, Naoki Watanabe, Alistair Wilson and participants at seminars in Boston College, Fukuoka, Georgetown, Higher School of Economics, Hitotsubashi, HKUST, Innsbruck, Keio, Kyoto, Lisbon, McMaster, Michigan, Max-Planck Institute Munich, New Economic School, NYU, Otaru, Rice, Southampton, Tokyo, University of Technology Sydney, Waseda, the 14th SAET conference at Waseda, the “Designing Matching Markets” workshop at WZB Berlin, the Economic Theory workshop at Penn State University, the Match-up conference at the University of Glasgow, and the SITE Conference at Stanford for helpful discussions as well as Nina Bonge for programming and helping us to run the experiments and Jennifer Rontganger for copy editing. We would also like to thank the associate editor and three anonymous referees for their helpful and constructive comments. Hafalir acknowledges financial support from National Science Foundation grant SES-1326584 . K{\"u}bler and Hakimov acknowledge financial support from the Deutsche Forschungsgemeinschaft (DFG) through CRC TRR 190 . Kurino acknowledges financial support from Japan Society for the Promotion of Science KAKENHI Grant Number 15K13002 . All remaining errors are our own. Publisher Copyright: {\textcopyright} 2018 Elsevier Inc.",
year = "2018",
month = jul,
doi = "10.1016/j.jet.2018.05.009",
language = "English",
volume = "176",
pages = "886--934",
journal = "Journal of Economic Theory",
issn = "0022-0531",
publisher = "Academic Press Inc.",
}