A Supply and Demand Model of the College Admissions Problem

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A Supply and Demand Model of the College Admissions Problem

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Title: A Supply and Demand Model of the College Admissions Problem
Author: Chade, Hector; Lewis, Gregory; Smith, Lones

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Citation: Chade, Hector, Gregory Lewis, and Lones Smith. 2009. A Supply and demand model of the college admissions problem. Faculty working paper, Department of Economics, Harvard University.
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Abstract: We develop the first Bayesian model of decentralized college admissions, with heterogeneous students, costly portfolio applications, and noisy college evaluations. Students face a nontrivial portfolio choice, and colleges choose admissions standards that act like market-clearing prices.
We derive the two college model equilibrium, deriving a “law of demand”. Surprisingly, the worse college might impose higher standards, and weaker students sometimes apply more aggressively. The lesser college impacts its rival through student portfolio reallocation. Also, the weaker college counters affirmative action at its rival with a discriminatory admissions policy, and may poach students from its rival using early admissions.
Published Version: http://www.economics.harvard.edu/faculty/lewis/files/cls2009_dec.pdf
Terms of Use: This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#OAP
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:4481401
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