It is well-known that many people are overconfident and that this can lead to inefficient decisions. In the context of Higher Education (HE) this could mean that if young people overestimate their probability to graduate, too many will enroll in university and subsequently dropout. Indeed many Higher Education institutions – both with and without selective admission – face the problem that a great number of students switch to another field (or dropout) in the first year. This is inefficient for both the student and the institution.To examine whether information provision helps to reduce this inefficiency in the context of schooling decisions, a randomized experiment was conducted at the University of Amsterdam. A quarter of the applicants to the undergraduate program in economics and business were given objective information about past graduation rates of students with their characteristics (same gender, grade point average and mathematics grade in high school). Another quarter were invited for a personal interview where success rates and motivation were discussed at a general level. The third quarter went through a realistic course day in which the graduation rates of students with similar characteristics was derived and made very explicit. Finally there was a control group of students that were enrolled directly without additional treatment. The results suggest that only a realistic experience prior to enrollment affect students’ enrollment choices. Providing objective information about graduation rates leads students to update their beliefs about others, but not themselves.


Adam S. Booij

Amsterdam School of Economics


26.09.2012 | 11:00-13:30


ZEW, L 7,1 D-68161 Mannheim


Raum 1