anonymous2012 wrote:
kmcduw wrote:
anonymous2012 wrote:
How about this: if you are going to get an invite, there is a 100% chance Stanford will tell you about it between now and December 12th.
14%/7%/1%/0%, it's all irrelevant.
It is relevant. As my expectation of going to business school rises, my propensity to do certain things around home such as purchase new furniture that would be difficult to move or renew college football season tickets declines.
You are right. I can see how knowing the difference between a 3% chance of an invite that carries under a 50% admittance chance or a 7% chance of an interview that carries under a 50% admittance chance is very relevant in the decision to buy furniture and football tickets in the next three weeks.
Initial expectation of an interview is 14%, not 7%.
Yes, my personal anecdote re: a decision on whether to renew my season tickets by last Friday's deadline was not material, but there are other deadlines that are. Let's consider an applicant who is considering submitting a round 2 application to Haas (due 11/29/12):
In this case, the applicant experiences the following possible outcomes:
Admission to both schools: 1%
Admission to Stanford and not Haas: 6%
Admission to Haas and not Stanford: 11%
Admission to neither: 82%
But if the odds of admission to Stanford are reduced to 2% based on my analysis above, the outcomes change to:
Admission to both schools: 0%
Admission to Stanford and not Haas: 2%
Admission to Haas and not Stanford: 12%
Admission to neither: 86%
So in essence, there is a marginal increase of 1% in the student's probability of ultimately attending Haas. If we presume that the value of the MBA to be the simple sum of the increase in applicant salary for the number of post-MBA years worked**, the value of the Haas MBA is $88,819/year for 35 years to retirement, or $3,108,665. 1% of that would be $30,109, so the yet-to-be-invited applicant should be that much more interested in applying to Haas than before.
*I'm well aware that there is probably some co-variance between admission to various schools. I've never seen a good study on it, so we will have to just assume that there isn't any.
**This would require wage growth to equal the discount rate, which, although not necessarily accurate, is reasonable.