MICRO/THEORY: Multidimensional Screening in College Admissions: Should Top Colleges Admit Students Through A Lottery; Professor Jimmy Chan (The Chinese University of Hong Kong)

Abstract

Colleges care but cannot observe the motivations of their applicants. If a college ranks applicants strictly test scores, it will reject many highly motivated applicants. We show that a college can use an admissions lottery to dissuade less committed applicants. It is often optimal for more selective colleges to admit at least some students through a lottery while less selective ones admit strictly by test scores. Thus, a college's optimal admissions policy depends on its ranking, and strict meritocracy is often inefficient.