Optimal School Design

40 Pages Posted: 8 Jul 2021 Last revised: 9 Jul 2021

See all articles by Jacopo Bizzotto

Jacopo Bizzotto

Oslo Business School - OsloMet

Adrien Vigier

University of Oxford - Department of Economics

Date Written: June 30, 2021


We consider a population of students with heterogeneous characteristics, and examine the dual design problem consisting of (a) allocating students to schools and (b) choosing how to grade students in school, with a view to optimizing students' incentives to work hard. We show that any optimal school design exhibits stratification, and more lenient grading at the top-tier schools than at the bottom-tier schools. Our results highlight a novel trade-off between the size of the pie and its equal division in the context of school design.

Keywords: Education, Moral Hazard, Grading, Peer Effects, Stratification

JEL Classification: D02, D82, D86

Suggested Citation

Bizzotto, Jacopo and Vigier, Adrien, Optimal School Design (June 30, 2021). Available at SSRN: https://ssrn.com/abstract=3877063 or http://dx.doi.org/10.2139/ssrn.3877063

Jacopo Bizzotto (Contact Author)

Oslo Business School - OsloMet ( email )

Pilestredet 35
Oslo, 0166

Adrien Vigier

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom

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