Modeling College Admission as a Signaling Game

Joseph Rekus,Yixiao Jiang

doi:10.11114/aef.v8i6.5394

Abstract

This paper models the college admission process as a signaling game between the admissions office and a pool of heterogeneous applicants characterized by academic abilities and demonstrated interest. In the screening and selection process, applicants attempt to signal their private information through their performance on a standardized test (for academic abilities) and interview (for demonstrated interest). We show, under general conditions, that a separating equilibrium exists in which it is incentive-compatible for applicants to reveal their characteristics truthfully, and thus the admissions office does not fall victim to the problem of information asymmetry. Furthermore, we delineate how this equilibrium can be induced by setting appropriate “scoring” thresholds associated with standardized tests and interviews.

Highlights

In regard to the distribution of scholarship awards, it is a common strategy for university admissions offices to first stratify the prospective students into categories based on a selected set of metrics, allocate the awards among the groups in a hierarchical manner
To the best of our knowledge, the information asymmetry between the admissions office and college applicants has not been studied in a formal economic model when the former is distributing a scholarship
We show the cost associated with the standardized test as a function of λ in the graph below to present the permissible range of λ* graphically

Summary

Introduction

In regard to the distribution of scholarship awards, it is a common strategy for university admissions offices to first stratify the prospective students into categories based on a selected set of metrics (such as high or low academic ability, initiative, etc.), allocate the awards among the groups in a hierarchical manner. There has been an increase in the percentage of students seeking formal help in standardized test preparation and that access to this type of assistance has become more available, for students of high-income families All of this seemingly suggests the obvious: in general, imitative behavior is a prevalent phenomenon in the college admissions process and increasingly so. What is even more disturbing is that Bound et al (2009) had not found any evidence that an intensification of test-taking and test-prep culture has led to a general increase in academic ability This suggests that imitative behavior imposes an economic cost on applicants and gives more reason for the admissions office to combat it.

The Model

Equilibrium

ZA so that

Conclusion