Aftermarket Frictions and the Cost of Off-Platform Options in Centralized Assignment Mechanisms

Adam Kapor, Mohit Karnani, Christopher A. Neilson, "Aftermarket Frictions and the Cost of Off-Platform Options in Centralized Assignment Mechanisms", Journal of Political Economy (July 2024), 2024, doi: 10.1086/729068.

@article{ platforms_2024,
  title = {Aftermarket Frictions and the Cost of Off-Platform Options in Centralized Assignment Mechanisms},
  author = {Kapor, Adam and Karnani, Mohit and Neilson, Christopher A.},
  journal = {Journal of Political Economy (July 2024)},
  year = {2024},
  doi = {10.1086/729068},
  abstract = {We study the welfare and human capital impacts of colleges' (non)participation in Chile's centralized higher-education platform, leveraging administrative data and two policy changes: the introduction of a large scholarship program and the inclusion of additional institutions, which raised the number of on-platform slots by approximately 40\%. We first show that the expansion of the platform raised on-time graduation rates. We then develop and estimate a model of college applications, offers, wait lists, matriculation, and graduation. When the platform expands, welfare increases, and welfare, enrollment, and graduation rates are less sensitive to off-platform frictions. Gains are larger for students from lower-socioeconomic-status backgrounds.},
  url = {https://www.christopher-neilson.com/work/documents/Platforms/platform_externalities.pdf},
  url_article = {https://doi.org/10.1086/729068}
}