Template-type: ReDif-Paper 1.0
Author-Name: Liu, Kaiqi
Author-workplace-name: RS: GSBE UM-BIC, Microeconomics & Public Economics
Author-Name: Rusch, Hannes
Author-workplace-name: RS: GSBE UM-BIC, Microeconomics & Public Economics, RS: GSBE other - not theme-related research
Author-Name: Seel, Christian
Author-workplace-name: RS: GSBE other - not theme-related research, Microeconomics & Public Economics
Author-Name: Terstiege, Stefan
Author-workplace-name: RS: GSBE UM-BIC, Microeconomics & Public Economics
Title: Competition in Higher Education: Sorting, Ranking and Fees
Abstract: We model student enrollment in markets for higher education where public universities, private non-profit universities, and private for-profit universities compete. Universities differ with respect to their capacity, graduation probability, and profit objective; students differ in ability. The value of a diploma at each university depends on its endogenous ranking based on average student ability.<br/><br/>In every equilibrium, the private for-profit university attracts the least able students. Under additional conditions, the private non-profit university attracts the top students. Paradoxically, a higher capacity at the public university might decrease its equilibrium market share as it incentivizes the for-profit university to compete more aggressively. The for-profit university benefits from an increased enrollment in higher education.<br/>
Classification-JEL: c78,i23
Series: GSBE Research Memoranda
Creation-Date: 20240418
Number: 005
File-URL: https://cris.maastrichtuniversity.nl/ws/files/192195891/RM24005.pdf
File-Format: application/pdf
File-Size: 703607
Handle: Repec:unm:umagsb:2024005
DOI: 10.26481/umagsb.2024005