Student incentives and preferential treatment in college admissions

We consider a framework in which the optimal admissions policy of a purely academic-quality oriented college implements preferential treatment in favor of the student from the deprived socioeconomic background which maximizes the competition between candidates. We find that the exact form of the preferential treatment admissions policy matters for student incentives and hence for student-body diversity in equilibrium. Preferential treatment policy in college admissions often takes, or is perceived to take, an additive form where the score of the applicant from the deprived background is augmented by a fixed number of points. Such a preferential treatment policy fails to incentivize students from the deprived background. Despite the affirmative action, the level of preferential treatment that achieves academic excellence leaves student-body diversity unchanged compared with a background-blind admissions policy and leads to a higher intergroup score gap.