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 are uncertain. Students thus face a portfolio choice problem in their application decision, while colleges choose admissions standards that act like market-clearing prices. Enrollment at each college is affected by the standards at the other college through student portfolio reallocation. In equilibrium, student-college sorting may fail: weaker students sometimes apply more aggressively, and the weaker college might impose higher standards. Applying our framework, we analyse affirmative action, showing how it induces minority applicants to construct their application portfolios as if they were majority students of higher caliber.

Journal Article General Equilibrium with a Replenishable Natural Resource Get access Vernon L. Smith Vernon L. Smith California Institute of Technology Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 41, Issue 5, December 1974, Pages 105–115, https://doi.org/10.2307/2296374 Published: 01 December 1974

Journal Article Minimization of Economic Rent in Spatial Price Equilibrium Get access Vernon L. Smith Vernon L. Smith Lafayette and Stanford Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 30, Issue 1, February 1963, Pages 24–31, https://doi.org/10.2307/2296027 Published: 01 February 1963

We model entry incentives in auctions with risk-neutral bidders and characterize a symmetric equilibrium in which the number of entrants is stochastic. The presence of too many potential bidders raises coordination costs that detract from welfare. We show that the seller and society can benefit from policies that reduce market thickness (i.e., the relative abundance of buyers). Our analysis extends well-known revenue-equivalence and ranking theorems but also demonstrates that variations in the auction environment affect optimal policies (e.g., reservation prices) in ways not anticipated by models that ignore entry.

Introduction, 600. — A model of waste reuse, 601. — Prices in the control model, 605. — Conditions for complete and zero recycling, 607. — Pollution under free competition, 608. — Effects of population, 611. — Interpretation as a waste reduction model, 612. — Material production from natural resources, 612. — Summary and discussion of policy, 614.