Ethncal for ADCOM to ask about other schools ?

I'd say tell the adcom if the school is in the same bracket rank-wise or higher. If the school is ranked significantly lower, keep it private.
I think it's perfectly OK for an adcom to ask about the competition. The worst thing that can happen is that the adcom would not grant the extension; on the upside, your friend might get some money. If I were in the same situation, I would take the risk

I agree with you nervous...If your friend is waiting for decision from same rank school than he might not have anything to lose. Infact he can play nice bargain from this opportunity. Otherwise it looks really unethical on part of adcom to ask such a silly question.

it's also possible the adcom wants to engage your friend - when we know that someone is making a decision, we naturally want to the context. The adcom may have insight.

Or they could just be calculating the value of the decision....who knows!

I would throw my support behind disclosing it if it's a peer ranked or higher ranked school.

I've had this question asked to me by both Vanderbilt and Carnegie Mellon during admissions interviews. What i've done is try to be selective and work this question to your favor. Since i'm applying to schools largely focused on a specific region due to my wife's medical license, i have prefaced my answer to that question with that fact. This also gives you a great opportunity to explain why you like this school in particular as compared to those, and why it's your #1 choice.

I would expect people to see this question in admissions interviews and in that situation i think it would be pretty hard to say "i don't think that's any of your business". You might come off as rude... So that's how i've tried to play it. Also for the most part my schools of interest are generally within the same tier so that probably helps (UVa, UNC, Vanderbilt, CMU Tepper, and Georgetown).

I just got asked the question by the CMU alumnus with whom I have been in contact with throughout the application process. She advised me to ask for an extension (CMU's deadline is 02/29) and let the adcom at CMU know about the offer from Ross. I did, let's see what happens.

random question:

Can schools technically discover where else you applied by looking at your FAFSA report, which you put multiple schools on? I actually don't want each other to know.

No ethical issue here. Your friend should reveal the other school. It cannot hurt.

The schools are just trying to determine what the competition is, and to figure out what they need to do to recruit your friend to their school. They will likely compare/contrast the strengths/weaknesses of the two schools in an effort to "sell" their school to him.

Riverripper is right in that it could lead to a scholarship. (In fact, if you're trying to negotiate a larger scholarship award, a school may ask you to verify other scholarships by sending you a copy of the other award letters. Don't be shy about doing that.)

When I was the Director of MBA Admissions at a top-30 school, I asked this question all the time. It's interesting to explore the judgement a candidate uses in their choice set of schools, and it enabled me to more closely align my program's strengths with the candidates goals.

Did candidates always tell me the truth? Of course not. However, I valued a candidate's trust in me when they were willing to reveal their other schools.

I think schools can find out which other schools have you applied to by looking at your GMAT score report!
Anyway, consider ignoring this question on the application if possible, and if not then you should probably mention 2 other schools which will be a bit easier to get into, than the current school (not much easier).