Auctioning Off Admission to Exclusive Universities

Back in 1990, I recommended that universities could ease their funding difficulties by auctioning off the last 50 - 100 admissions spots to the highest bidders. I'm delighted to see that Duke University (and probably others) has put my recommendation into practice, albeit somewhat crudely and with little or no publicity [h/t to Katie at A Constrained Vision]:

Under-endowed compared with rivals such as Harvard, Princeton and Stanford, Duke has been particularly aggressive in snaring donors through admissions breaks. Widely considered one of the nation's top ten universities, Duke accepts 23% of its applicants and turns down more than 600 high-school valedictorians a year. Three-fourths of its students score above 1320 out of a perfect 1600 on the SATs.

Yet in recent years, Duke says it has relaxed these standards to admit 100 to 125 students annually as a result of family wealth or connections, up from about 20 a decade ago. These students aren't alumni children and were tentatively rejected, or wait-listed, in the regular admissions review. More than half of them enroll, constituting an estimated 3% to 5% of Duke's student body of 6,200....

During an all-day meeting in March, Mr. Guttentag and John Piva Jr., senior vice president for development, debate these 120 cases, weighing their family's likely contribution against their academic shortcomings.

The Duke system (and, I would venture, the system in place at many other institutions) is a probablistic auction. Admission places are set aside for some students based on the expected present discounted value of the future donations from the students and their parents. I wonder how many universities do this, and when they started doing it.