Regulation in the Market for Education and Optimal Choice of Curriculum

23 Pages Posted: 2 Mar 2009 Last revised: 20 May 2009

See all articles by Gerald Eisenkopf

Gerald Eisenkopf

University of Konstanz - Faculty of Economics and Statistics

Ansgar Wohlschlegel

Portsmouth Business School

Date Written: March 2, 2009

Abstract

We analyze educational institutions' incentives to set up demanding or lax curricula in duopolistic markets for education with endogenous enrolment of students. Comparing the case of regulated tuition fees with an unregulated market, we identify the following inefficiencies: Under regulated tuition fees universities will set up inefficiently lax curricula in an attempt to please low-quality students, which is more pronounced if there is a high spillover from teaching into research. On the other hand, unregulated institutions set up excessively demanding curricula in order to compete for high-ability students. A larger teaching-research spillover makes it more likely that the former inefficiency dominates the latter.

Keywords: Secondary Education, Higher Education, Product Differentiation, Price Competition, Vouchers

JEL Classification: I28, L13

Suggested Citation

Eisenkopf, Gerald and Wohlschlegel, Ansgar, Regulation in the Market for Education and Optimal Choice of Curriculum (March 2, 2009). Available at SSRN: https://ssrn.com/abstract=1351727 or http://dx.doi.org/10.2139/ssrn.1351727

Gerald Eisenkopf

University of Konstanz - Faculty of Economics and Statistics ( email )

Universitaetsstr. 10
78457 Konstanz
Germany

Ansgar Wohlschlegel (Contact Author)

Portsmouth Business School ( email )

Portsmouth, PO1 3DE
United Kingdom

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