Criticism is mounting on business schools for their excessive focus on research and for neglecting teaching. We show that if students have imperfect information about a school’s overall capabilities and if business schools differ in their research productivity, the least productive schools may do as much research as the top-tier ones only to manipulate student’s expectations. In turn, the most productive schools might resort to excess research in order to signal their type in the eyes of future students. This signalling equilibrium is characterized by a relative neglect of teaching by the top-tier schools. Such a situation is socially inefficient as compared to the perfect information case.
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Paper provided by ESSEC Research Center, ESSEC Business School in its series ESSEC Working Papers with number
DR 08002.
Find related papers by JEL classification: D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information I23 - Health, Education, and Welfare - - Education - - - Higher Education Research Institutions
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