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University competition: Symmetric or asymmetric quality choices?

Author

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  • VANHAECHT, Eve
  • PAUWELS, Wilfried

Abstract

In this paper we model competition between two publicly financed and identical universities deciding on quality and on admission standards. The education offered by the two universities is differentiated horizontally and vertically. If horizontal differentiation dominates, the Nash equilibrium is symmetric, and the two universities offer the same quality levels. If vertical differentiation dominates, the Nash equilibrium is asymmetric, and the high quality university attracts the better students. Symmetric and asymmetric equilibria may also coexist. We highlight the importance of three driving forces behind these results: a single crossing condition, the peer group effect, and the students’ mobility costs. We also compare the monopoly and the duopoly case. The model we use is an extension of Del Rey’s [8] model.

Suggested Citation

  • VANHAECHT, Eve & PAUWELS, Wilfried, 2005. "University competition: Symmetric or asymmetric quality choices?," Working Papers 2005021, University of Antwerp, Faculty of Business and Economics.
    • Handle: RePEc:ant:wpaper:2005021
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    File URL: https://repository.uantwerpen.be/docman/irua/12b4a1/b963bf9a.pdf
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    Citations

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    Cited by:

    1. K. Sonin & I. Khovanskaya & M. Yudkevich, 2008. "Budget Uncertainty and Faculty Contracts: A Dynamic Framework for Comparative Analysis," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 12.
    2. Laura Thissen & Sjef Ederveen, 2006. "Higher education; time for coordination on a European level?," CPB Discussion Paper 68.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Abe, Yasumi & Watanabe, Satoshi P., 2012. "A NEW APPROACH TO ANALYZING UNIVERSITY PRESTIGE AND INTERNAL RESOURCE ALLOCATION: Geometric Interpretations and Implications," University of California at Berkeley, Center for Studies in Higher Education qt2tz763xp, Center for Studies in Higher Education, UC Berkeley.
    4. Laura Thissen & Sjef Ederveen, 2006. "Higher education; time for coordination on a European level?," CPB Discussion Paper 68, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Jürgen Janger, 2013. "Hochschulsteuerung im Kontext der Autonomie der Universitäten," WIFO Monatsberichte (monthly reports), WIFO, vol. 86(2), pages 159-171, February.

    More about this item

    Keywords

    (Higher) Education; Research; Competition; Horizontal and vertical dominance; Asymmetric equilibria;
    All these keywords.

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