College Admissions as a Two-Step Information Game

This paper extends a previous model of college admissions with aggregate preference risk to a world with multiple stages of admission, namely a binding early admission stage and regular admission stage. We show that the inclusion of an early stage provides information to schools that offer such admissions programs that they can use to mitigate risk of over-enrollment, and that in some cases schools may be able to achieve efficient equilibria. Furthermore, we show the timing of the game allows for schools to weaken signals about the state of the world, highlighting the importance of information and timing in our model.