Regulation in the Market for Education and Optimal Choice of Curriculum

Gerald Eisenkopf and Ansgar Wohlschlegel

No 2011-16, Working Paper Series of the Department of Economics, University of Konstanz from Department of Economics, University of Konstanz

Abstract: We analyze educational institutions’ incentives to set up demanding or lax curricula in duopolistic markets for education with endogenous enrolment of students. We assume that there is a positive externality of student achievement on the local economy. Comparing the case of regulated tuition fees with an unregulated market, we identify the following inefficiencies: Under regulated tuition fees schools will set up inefficiently lax curricula in an attempt to please low-quality students even if schools internalize some of the externality. On the other hand, unregulated schools set up excessively differentiated curricula in order to relax competition in tuition fees. Deregulation gets more attractive if a larger fraction of the externality is internalized.

Keywords: Education; Local Externalities; Product Differentiation; Price Competition; Vouchers (search for similar items in EconPapers)
JEL-codes: I28 L13 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2011-05-24
New Economics Papers: this item is included in nep-edu, nep-lab, nep-reg and nep-ure
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Related works:
Journal Article: Regulation in the market for education and optimal choice of curriculum (2012)
Working Paper: Regulation in the Market for Education and Optimal Choice of Curriculum (2011)
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