Arbeitspapier
Obvious Mistakes in a Strategically Simple College Admissions Environment
In a centralized marketplace that was designed to be simple, we identify participants whose choices are dominated. Using administrative data from Hungary, we show that college applicants make obvious mistakes: they forgo the free opportunity to receive a tuition waiver worth thousands of dollars. At least 10 percent of the applicants made such mistakes in 2013. Costly mistakes have externalities: they transfer tuition waivers from high- to low-socioeconomic status students, and increase the number of students attending college. To shed light on the mechanisms underlying mistakes, we exploit a reform that substantially increased the selectivity of admission with financial aid in some fields of study. Increased admission selectivity raises the likelihood of making obvious mistakes, especially among high-socioeconomic status and low-achieving applicants. Our results suggest that mistakes are more common when their expected cost is lower. Still, the average cost of a mistake in 2013 was 114-365 dollars.
- Language
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Englisch
- Bibliographic citation
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Series: Tinbergen Institute Discussion Paper ; No. 17-107/V
- Classification
-
Wirtschaft
Game Theory and Bargaining Theory: General
Market Design
Allocative Efficiency; Cost-Benefit Analysis
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- Subject
-
College admissions
dominated strategies
market design
obvious misrepresentation
school choice
strategy-proof
- Event
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Geistige Schöpfung
- (who)
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Shorrer, Ran I.
Sóvágó, Sándor
- Event
-
Veröffentlichung
- (who)
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Tinbergen Institute
- (where)
-
Amsterdam and Rotterdam
- (when)
-
2017
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Shorrer, Ran I.
- Sóvágó, Sándor
- Tinbergen Institute
Time of origin
- 2017
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