Cora Wang

Student Preference Uncertainty and Colleges' Incentives for Early Admissions (2025)

Abstract: This paper studies how student preference uncertainty shapes elite colleges’ strategic incentives to adopt Early Decision (ED). I develop a two-stage game in which two colleges first choose whether to adopt ED and then set their admission criteria, while students apply under ex ante uncertainty about their eventual preferences. An equilibrium in which both schools adopt ED always exists, whereas an equilibrium in which neither school adopts ED can be sustained only when the prevalence of student preference uncertainty is sufficiently high. Among similarly popular schools, the welfare consequences of the ED-equilibrium vary with the prevalence of preference uncertainty: it is efficient when prevalence is low, sustained by a prisoner’s dilemma at intermediate levels, and is dominated by the no-ED equilibrium when prevalence is high. These results provide a theoretical explanation for why decentralized admissions markets may fail to coordinate on collectively preferred admissions policies.

[paper] [slides]