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Peer Group and Distance: When Widening University Participation is Better

Listed author(s):
  • Berardino Cesi
  • Dimitri Paolini

type="main"> We study the effect of a new university in a two-city model in which individuals’ utility depends on own ability, peer group ability, formal education and mobility costs. We compare a monopoly (one university in one city) with a two-university system (one university in each city). Introducing the second university improves welfare when the fixed cost of each university is low. With two universities, we obtain a symmetric equilibrium for every mobility cost and asymmetric equilibria for low mobility costs. The symmetric system induces the highest welfare and is also Strong Nash (for high mobility costs).

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File URL: http://hdl.handle.net/10.1111/manc.12049
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Article provided by University of Manchester in its journal The Manchester School.

Volume (Year): 82 (2014)
Issue (Month): (December)
Pages: 110-132

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Handle: RePEc:bla:manchs:v:82:y:2014:i::p:110-132
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