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Inter-university competition and high tuition fees

Author

Listed:
  • Marie-Laure Cabon-Dhersin

    (CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)

  • Jonas Didisse

    (UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)

Abstract

This paper proposes a competition model in which universities freely fix their tuition fees in a setting where their soft capacity is chosen endogenously. Because of the growing competition between universities to attract additional students, universities choose to support an increasing marginal cost for students enrolled beyond their initial capacity. Our results show that i) a more convex cost leads the universities to choose a larger capacity but also higher tuition fees; ii) when the marginal cost is low, an increase in tuition fees with the number of universities is possible; iii) when the marginal cost is sufficiently high, competition between an increasing number of universities maintains fees at their maximum level (collusive fees) without reducing either the total number of admissions or social welfare.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Marie-Laure Cabon-Dhersin & Jonas Didisse, 2017. "Inter-university competition and high tuition fees," Post-Print hal-02356872, HAL.
    • Handle: RePEc:hal:journl:hal-02356872
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    1. is not listed on IDEAS
    2. Elena Konsulova-Atanasova, 2019. "Students’ fees for higher education – the main instrument for attracting students," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 86-101.

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