Guidance counselors generally advise college applicants to diversify their applications across schools they believe to be safeties, matches, and reaches. Yet, prevailing economic theories of school choice suggest that such hedging strategies are suboptimal and that applicants should focus on applying to the best schools they have a chance of getting into.

In a paper in the American Economic Review, authors S. Nageeb Ali and Ran I. Shorrer show how incorporating correlations among admissions decisions rationalizes the motive to hedge. Their findings highlight the tradeoffs applicants face under realistic assumptions and may offer insights into the optimal design of admission processes.

Ali and Shorrer recently spoke with Tyler Smith about how the admissions process can be correlated and the implications for students.