Financial Aid and Early Admissions at Selective Need-Blind College

I study a college-admissions model with two need-blind colleges and heterogeneous students. In a game in which colleges can choose a financial aid policy and either binding, nonbinding, or no early admissions, a unique equilibrium outcome exists. In equilibrium—and consistent with data—the more prestigious and wealthier college is more selective, has a more generous financial aid policy, and offers nonbinding early admissions while the other college offers a binding program. Compared to the counterfactual in which only regular admissions are offered, early admissions make the more prestigious college worse off but make all students and the other college better off