Competitive Screening and Information Transmission

Abstract We study competitive screening for high-ability students first between schools and then between colleges. By observing applicants' schools, colleges use information generated by schools' screening. Students with competing offers accept the most preferred one, increasing the screening costs of unpopular schools. When preferences between schools are more heterogeneous, school screens more, increasing the number of students with multiple offers. While this leads to schools and colleges attracting more high-ability students, fewer students attend their preferred schools. Students' ability to obtain better matches among colleges by strategically choosing which school to attend is fairly limited