Dominated Choices in a Strategically Simple College Admissions Environment

Abstract

Although many centralized school assignment systems use the strategically simple deferred-acceptance mechanism, applicants often make dominated choices. Using administrative data from Hungary, we show that 11% of college applicants forgo the free opportunity to receive a tuition waiver. Between 12.3% and 18.7% of these dominated choices are consequential, costing 6,600 dollars on average. Our results suggest that dominated choices are more common when their expected utility cost is lower. Since tuition waivers are highly demanded, dominated choices increase the total number applicants assigned to college.