Obvious Mistakes in a Strategically Simple College Admissions Environment: Causes and Consequences

59 Pages Posted: 28 Jun 2017 Last revised: 30 Mar 2018

Ran I. Shorrer

Pennsylvania State University

Sándor Sóvágó

VU University Amsterdam

Multiple version iconThere are 2 versions of this paper

Date Written: March 26, 2018

Abstract

Although many centralized school assignment systems use strategically simple mechanisms, applicants often make dominated choices. Using administrative data from Hungary, we show that many college applicants forgo the free opportunity to receive a tuition waiver. We provide causal evidence that applicants make more such mistakes when applying to programs where tuition waivers are more selective. A non-negligible share of these mistakes are consequential, costing applicants approximately 3,000 dollars. Costly mistakes transfer waivers from high- to low-socioeconomic status students, and increase the number of admitted students. Our results suggest that mistakes are more common when their expected utility cost is lower.

Keywords: College admissions, dominated strategies, market design, obvious misrepresentation, school choice, strategy-proof

JEL Classification: C70, D47, D61, D63

Suggested Citation

Shorrer, Ran I. and Sóvágó, Sándor, Obvious Mistakes in a Strategically Simple College Admissions Environment: Causes and Consequences (March 26, 2018). Available at SSRN: https://ssrn.com/abstract=2993538 or http://dx.doi.org/10.2139/ssrn.2993538

Ran I. Shorrer (Contact Author)

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

Sándor Sóvágó

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

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