Endogenous Preferential Treatment in Centralized Admissions

31 Pages Posted: 14 Feb 2008

See all articles by Y. Stephen Chiu

Y. Stephen Chiu

The University of Hong Kong - School of Economics and Finance

Weiwei Weng

The University of Hong Kong - School of Economics and Finance

Date Written: September 2007

Abstract

A large portion of school and college places in the world are allocated through centralized admissions schemes. In this paper, we study a model of centralized admissions with the feature that schools are allowed to pre-commit to admitting qualified applicants who rank them as top choice over more qualified applicants who do not. We identify two motives for doing so. A less popular school may use the pre-commitment to steal applicants who otherwise would not choose it as their top choice (stealing motive); a popular school may use the pre-commitment to prevent its own applicants from being stolen (preemptive motive). We show the conditions for such motives to exist, and in doing so, illustrate the roles of school popularity, difference in schools' preferences, and relative school size.

Keywords: centralized admissions, commitment, endogenous preferential treatment, manipulation

JEL Classification: C78, D61, D78, I20

Suggested Citation

Chiu, Yiu Wah Stephen and Weng, Weiwei, Endogenous Preferential Treatment in Centralized Admissions (September 2007). Available at SSRN: https://ssrn.com/abstract=1093207 or http://dx.doi.org/10.2139/ssrn.1093207

Yiu Wah Stephen Chiu (Contact Author)

The University of Hong Kong - School of Economics and Finance ( email )

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Weiwei Weng

The University of Hong Kong - School of Economics and Finance ( email )

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