Tuition fees and admission standards: how do public and private universities really compete for students?
We study a market where two universities, a public and a private one, compete for students by setting admission standards. Students differ in ability and receive a wage premium for participating in higher education. This wage increases with the quality of the university attended. The private university maximizes profits, the public university maximizes welfare. We show that there is no "same-standard" equilibrium. In a specific example we show that multiple equilibria can exist. In one equilibrium the private university sets a higher admission standard, and in the other equilibrium the public university sets a higher admission standard.
|Date of creation:||Apr 2006|
|Contact details of provider:|| Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK|
Phone: +44 (0)116 252 2887
Fax: +44 (0)116 252 2908
Web page: http://www2.le.ac.uk/departments/economics
More information through EDIRC
|Order Information:|| Web: http://www2.le.ac.uk/departments/economics/research/discussion-papers Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fernando Galindo-Rueda & Anna Vignoles, 2005.
"The Declining Relative Importance of Ability in Predicting Educational Attainment,"
Journal of Human Resources,
University of Wisconsin Press, vol. 40(2).
- Fernando Galindo-Rueda & Anna Vignoles, 2004. "The Declining Relative Importance Of Ability In Predicting Educational Attainment," Royal Economic Society Annual Conference 2004 40, Royal Economic Society.