![]() For example, the undergraduate admissions office of the College of Arts and Sciences at the University of Michigan added 20 points (out of 150) to the underprivileged candidate's academic achievement score. However, preferential treatment policies often take an additive form. Fu (2006) examines affirmative action policy with a multiplicative form: the “academic achievement score” of a candidate from an underprivileged background is multiplied by a constant greater than one. In this paper we adapt Fu (2006) to investigate how the student effort incentive effects and student-body diversity depend on the exact form of the policy. The optimal admissions policy of a purely academic-quality oriented college also yields full student-body diversity as a byproduct. Furthermore the college's objective of academic excellence is in harmony with student-body diversity. Hence the optimal admissions policy of a purely academic-quality oriented college gives preferential treatment to the applicant from a disadvantaged background. 4 It helps level the playing field inducing candidates from both privileged and underprivileged backgrounds to invest more heavily in educational attainment. 3 In an all-pay auction framework Fu (2006) finds that affirmative action through preferential treatment creates positive cross-group interaction between applicants. 2 The strand of the literature most closely related to this paper studies how an academic-quality oriented college may use affirmative action admissions policies to increase the expected quality of the incoming class. The theoretical literature on affirmative action in education has grown rapidly since the 1996 California ban on color-sighted admissions in public schools. In this paper we analyze the effect of college admission policies on effort incentives of students from differing socioeconomic backgrounds. Therefore students from different backgrounds are more likely to be polarized in quality which may aggravate statistical discrimination in the post-college job market. Opponents of preferential treatment admissions policies often claim that students subject to preferential treatment have less incentive to put in effort to achieve higher academic quality. In practice this landmark ruling leaves the door open for a holistic socioeconomic background-sighted admissions policy allowing a less academically qualified candidate to be preferred. Bollinger (2003), the Supreme Court approved the use of race as a factor in the admissions decisions of the Law School of the University of Michigan. ![]()
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