attending a four-year college and lower student debt. The effect is more pronounced for students who receive less financial aid …

We develop a decentralized Bayesian model of college admissions with two ranked colleges, heterogeneous students and … two realistic match frictions: students find it costly to apply to college, and college evaluations of their applications … is uncertain. Students thus face a portfolio choice problem in their application decision, while colleges choose …

when an income tax has to be paid or when a subsidy is paid. We investigate this result further in a range of variations of …