wittykittyIm gonna write more than necessary because people keep asking so maybe its best someone dives into it.
In sum: It could be for various reasons;
1) They have applied for early decisions. Sometimes, students are applying to multiple schools and are receiving offers earlier. Hence they ask the university to provide them early decision so that they know how to move forward with their choice of school. (note that when you get an offer, you have a deadline to accept it - so students put pressure on schools that have yet to respond)
2) Sometimes students apply for scholarships to multiple schools, and get offered different packages or types of financial aid. So, if I got financial aid from school X and im waiting to hear back from Y to see if they have a better financial aid package, I would ask for early decision. (again, time constraint, you don't want to lose something at hand and need to know your options)
3) You are super duper out of this world and they don't want to lose you, so they want to give you a place early
I may have missed some reasons, but this is whats on the top of my mind