Competition Among Universities and the Emergence of the Elite Institution

19 Pages Posted: 27 Dec 2002

See all articles by Gianni De Fraja

Gianni De Fraja

University of Nottingham; Universita' di Roma; Centre for Economic Policy Research (CEPR)

Elisabetta Iossa

University of Rome Tor Vergata; IEFE Bocconi University; Centre for Economic Policy Research (CEPR)

Abstract

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.

Suggested Citation

De Fraja, Gianni and Iossa, Elisabetta, Competition Among Universities and the Emergence of the Elite Institution. Available at SSRN: https://ssrn.com/abstract=317823

Gianni De Fraja (Contact Author)

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Universita' di Roma ( email )

Dipartimento SEFEMEQ
Via Columbia n.2
Rome, Rome 00133
Italy

HOME PAGE: http://www.economia.uniroma2.it/docenti

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Elisabetta Iossa

University of Rome Tor Vergata ( email )

Via Columbia n.2
Rome, 00133
Italy

IEFE Bocconi University ( email )

Via Roentgen 1
Milan, Milan 20136
Italy

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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