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Competition between State Universities

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  • Lisa Grazzini
  • Annalisa Luporini
  • Alessandro Petretto

Abstract

We analyse how state university competition to collect resources may affect both research and the quality of teaching. By considering a set-up where two state universities behave strategically, we model their interaction with potential students as a sequential noncooperative game. We show that different types of equilibrium may arise, depending on the mix of research and teaching supplied by each university, and the mix of low- and high-ability students attending each university. The most efficient equilibrium results in the creation of an élite institution attended only by high-ability students who enjoy a higher teaching quality but pay higher tuition fees.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2011/wp-cesifo-2011-03/cesifo1_wp3373.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3373.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3373

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Keywords: university competition; research; tuition fees;

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References

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  1. DEL REY, Elena, . "Teaching versus research: a model of state university competition," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1501, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Reinhilde Veugelers & Frederick Van der Ploeg, 2008. "Reforming European Universities: Scope for an Evidence-Based Process," CESifo Working Paper Series, CESifo Group Munich 2298, CESifo Group Munich.
  3. De Fraja, Gianni & Iossa, Elisabetta, 2002. "Competition among Universities and the Emergence of the Elite Institution," Bulletin of Economic Research, Wiley Blackwell, Wiley Blackwell, vol. 54(3), pages 275-93, July.
  4. Gianni De Fraja & Paola Valbonesi, 2009. "The Design of the University System," Discussion Papers in Economics, Department of Economics, University of Leicester 09/19, Department of Economics, University of Leicester.
  5. Tania Oliveira, 2006. "Tuition fees and admission standards: how do public and private universities really compete for students?," Discussion Papers in Economics, Department of Economics, University of Leicester 06/6, Department of Economics, University of Leicester.
  6. Jean Hindriks & Gareth D. Myles, 2006. "Intermediate Public Economics," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262083442, December.
  7. Dennis Epple & Richard Romano, 2002. "Educational Vouchers and Cream Skimming," NBER Working Papers 9354, National Bureau of Economic Research, Inc.
  8. Philippe Aghion & Mathias Dewatripont & Caroline Hoxby & Andreu Mas-Colell & André Sapir, 2010. "The governance and performance of universities: Evidence from Europe and the US," ULB Institutional Repository, ULB -- Universite Libre de Bruxelles 2013/167268, ULB -- Universite Libre de Bruxelles.
  9. GAUTIER, Axel & WAUTHY, Xavier, 2004. "Teaching versus research: a multi-tasking approach to multi-department universities," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2004003, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  10. Alexander Kemnitz, 2004. "Funding, Competition And Quality In Higher Education," Royal Economic Society Annual Conference 2004, Royal Economic Society 130, Royal Economic Society.
  11. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, American Economic Association, vol. 88(1), pages 33-62, March.
  12. Rothschild, Michael & White, Lawrence J, 1995. "The Analytics of the Pricing of Higher Education and Other Services in Which the Customers Are Inputs," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 103(3), pages 573-86, June.
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Cited by:
  1. Krieger, Tim & Haupt, Alexander M. & Lange, Thomas, 2011. "Competition for the International Pool of Talent: Education Policy and Student Mobility," Proceedings of the German Development Economics Conference, Berlin 2011, Verein für Socialpolitik, Research Committee Development Economics 49, Verein für Socialpolitik, Research Committee Development Economics.
  2. Beath, John & Poyago-Theotoky, Joanna & Ulph, David, 2011. "University funding systems: impact on research and teaching," Economics Discussion Papers, Kiel Institute for the World Economy 2011-1, Kiel Institute for the World Economy.
  3. CESI, Berardino & PAOLINI, dimitri, 2012. "Peer group and distance: when widening university participation is better," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2012042, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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