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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. 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, vol. 103(3), pages 573-86, June.
  2. Rey, Elena Del, 2001. "Teaching versus Research: A Model of State University Competition," Journal of Urban Economics, Elsevier, vol. 49(2), pages 356-373, March.
  3. Philippe Aghion & Mathias Dewatripont & Caroline Hoxby & Andreu Mas-Colell & André Sapir, 2010. "The governance and performance of universities: evidence from Europe and the US," Economic Policy, CEPR & CES & MSH, vol. 25, pages 7-59, 01.
  4. Kemnitz, Alexander, 2003. "Funding, Competition and Quality in Higher Education," Discussion Papers 610, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
  5. De Fraja, Gianni & Valbonesi, Paola, 2012. "The design of the university system," Journal of Public Economics, Elsevier, vol. 96(3), pages 317-330.
  6. Tania Oliveira, 2006. "Tuition fees and admission standards: how do public and private universities really compete for students?," Discussion Papers in Economics 06/6, Department of Economics, University of Leicester.
  7. Dennis Epple & Richard Romano, 2002. "Educational Vouchers and Cream Skimming," NBER Working Papers 9354, National Bureau of Economic Research, Inc.
  8. GAUTIER, Axel & WAUTHY, Xavier, 2004. "Teaching versus research: a multi-tasking approach to multi-department universities," CORE Discussion Papers 2004003, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  9. Hindriks, Jean & Myles, Gareth D., 2013. "Intermediate Public Economics," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262018691, December.
  10. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
  11. Reinhilde Veugelers & Frederick Van der Ploeg, 2008. "Reforming European Universities: Scope for an Evidence-Based Process," CESifo Working Paper Series 2298, CESifo Group Munich.
  12. De Fraja, Gianni & Iossa, Elisabetta, 2002. "Competition among Universities and the Emergence of the Elite Institution," Bulletin of Economic Research, Wiley Blackwell, vol. 54(3), pages 275-93, July.
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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 49, Verein für Socialpolitik, Research Committee Development Economics.
  2. CESI, Berardino & PAOLINI, dimitri, 2012. "Peer group and distance: when widening university participation is better," CORE Discussion Papers 2012042, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Beath, John & Poyago-Theotoky, Joanna & Ulph, David, 2012. "University funding systems: Impact on research and teaching," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 6(2), pages 1-24.

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