Pareto Improvements in the Contest for College Admissions

We model high school students’ competition for college admissions as an all-pay contest with many players and prizes, and investigate how reducing the information revealed to colleges about students’ performance can improve students’ welfare in a Pareto sense. Less information reduces the assortativity of the resulting matching, which reduces welfare, but also mitigates competition and reduces student effort, which increases welfare. We characterize the Pareto frontier of Pareto improving policies, and also identify improvements that are robust to the distribution of college seats and students’ utilities from the same. We apply our results to data from the National Longitudinal Survey of Youth to identify Pareto improving policies in the United States.