Teaching versus Research: A Model of State University Competition
This paper analyzes a competition game between two universities that teach and research in the same jurisdiction. The resulting equilibrium is unique and symmetric but differs according to preferences, technologies and public policy. The budget for university finance is exogenously given and consists of lump-sum amount and a per-student allocation. Under this finance structure, we are able to identify four types of equilibria characterized, respectively, by full-time teaching,full-time research, selective teaching plus research and mass teaching plus research. Conditions for each of them to take place are derived. By manipulating the parameters of the finance scheme the government can, in some cases, determine final levels of research and education quality.
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- 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.
- Ronald G. Ehrenberg, 1999. "Adam Smith Goes to College: An Economist Becomes an Academic Administrator," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 99-116, Winter.
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