Endogenous Market Formation: Theory and Evidence from Chilean College Admissions

Explore a 32-minute lecture on endogenous market formation in the context of Chilean college admissions. Delve into the theoretical framework and empirical evidence presented by Soohyung Lee from Seoul National University. Examine how similarity in school quality and applicant coverage can lead to voluntary adoption of centralized matching systems. Discover the welfare-improving effects of these systems, particularly for students with limited resources. Analyze the empirical findings from Chilean college admissions data, which support the theoretical predictions. Learn how colleges of similar quality and size agreed to implement centralized matching, resulting in reduced vacancies and decreased disadvantages for students from poor families.