Holding the “A” Students Hostage? College Admissions with Grade Inflation and Noisy Test Scores

“Application files are piled high this month in colleges across the country. Admissions officers are poring over essays and recommendation letters, scouring transcripts and standardized test scores. But something is missing from many applications: a class ranking, once a major component in admissions decisions. In the cat-and-mouse maneuvering over admission to prestigious colleges and universities, thousands of high schools have simply stopped providing that information, concluding it could harm the chances of their very good, but not best, students.” “Schools Avoid Class Rankings, Vexing Colleges,” New York Times, March 5, 2006 We consider the strategic interplay between the disclosure of class rank information by high schools and the use of noisy standardized exams by colleges. Using a simple, stylized model of college admissions, we show that when high schools are symmetric and competing for the marginal admittance, non-disclosure of class rank may be a (weakly) dominant strategy resulting in a Prisoner’s Dilemma like outcome. But colleges may use the threat of an “SAT only” admissions policy to discipline high schools into providing the relevant class rank information. These threats may be credible under repeated play. We extend the model to the case where high schools have different student quality reputations and find that more reputable high schools have an even weaker incentive to disclose class ranks, but less reputable high schools a stronger incentive as they are less able to game for the marginal college admittance. This result helps explain why leading high schools, especially private college preparatory schools, are at the vanguard of the class rank non-disclosure movement. We discuss the implications of the current “SAT optional” trend in college admissions on further grade inflation and class rank non-disclosure.