Tuition fees as a commitment device

Hessel Oosterbeek, Bas van der Klaauw, Nadine Ketel and Jona Linde

No 9862, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper reports on a field experiment testing for sunk-cost effects in an education setting. Students signing up for extra-curricular tutorial sessions randomly received a discount on the tuition fee. The sunk-cost effect predicts that students who receive larger discounts will attend fewer tutorial sessions. For the full sample, we find little support for this hypothesis, but we find a significant effect of sunk costs on attendance for the 45% of students in our sample who are categorized as sunk-cost prone based on hypothetical survey questions. For them higher tuition fees can serve as a commitment device to attend classes.

Keywords: Field experiment; Higher education; Sunk-cost effect (search for similar items in EconPapers)
JEL-codes: C93 D03 I22 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-edu and nep-exp
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Working Paper: Tuition Fees as a Commitment Device (2014)
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