Endogenous Market Formation: Theory and Evidence from Chilean College Admissions
summary
Argues that colleges voluntarily form centralized matching when they are comparable in quality and applicant coverage, using a simple two-sided model where an application cost k blocks poorer students from applying to some schools. Tests predictions with micro administrative data 2010–2013 and regressions; two CRUCH/non‑CRUCH groups show coverage rising from 50% to 70% in 2012 after eight non‑CRUCH join, CRUCH vacancies dropping from ~50% to 8%, enrollment rises and the private‑voucher admission gap falls by about two thirds (≈3% early‑career income).
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