Biased Beliefs and the Dynamic Role of Information in College Choice

Even though information frictions have been widely studied regarding decisions involving higher education, most research has studied these frictions as static, overlooking the dynamic component that might be embedded in the process. In this study, we will focus on both components, static and dynamic, analyzing not only the potential frictions in the discrete decision of college-degree choice, but also the dynamic decision in investment on college admission preparation itself. We will test this by conducting a randomized controlled trial (RCT) for senior high school students in Chile attending a large college admission test preparation institution, and providing students with information about institution-degree characteristics, at (i) the beginning of the academic year (dynamic treatment) or (ii) shortly before the college application window (static treatment). By leveraging the results of the RCT, we will be able to recover the key parameters of the decision model and their interaction.