Is this not just a reality of this game? You mentioned Universities. For them 'fairness' is an independently important (though probably imposed) quality. Here there is no such force. Since there are always going to be application deadlines, it would take conscious effort or collaboration to avoid an exploding termsheet becoming the norm. Since it would adversely affect the lowest in the pecking order, you'll always have defectors.

A possible solution is more rounds. Even triennial intake is probably enough to let applicants time applications to meet their hierarchy of preferences.