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Competition Among Universities and the Emergence of the Élite Institution
Author(s) -
De Fraja Gianni,
Iossa Elisabetta
Publication year - 2002
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/1467-8586.00153
Subject(s) - competition (biology) , institution , set (abstract data type) , economics , microeconomics , higher education , section (typography) , class (philosophy) , mathematical economics , computer science , sociology , economic growth , ecology , artificial intelligence , biology , programming language , social science , operating system
We consider an environment where two education institutions compete by selecting the proportion of their funding devoted to teaching and research and the criteria for admission for their students, and where students choose whether and where to attend university. We study the relationship between the cost incurred by students for attending a university located away from their home town and the equilibrium configuration that emerges in the game played by the universities. Symmetric equilibria, where universities choose the same admission standard, only exist when the mobility cost is high; when the mobility cost is very low, there is no pure strategy equilibrium. For intermediate values of the mobility cost, only asymmetric equilibria may exist; the final section of the paper provides an example where asymmetric equilibria do indeed exist for a plausible and robust set of parameters.