Obvious Mistakes in a Strategically Simple College Admissions Environment: Causes and Consequences
59 Pages Posted: 28 Jun 2017 Last revised: 30 Mar 2018
Date Written: March 26, 2018
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: Suggested Citation