Suchergebnisse

We analyze the two goals behind the European Bologna Process of increasing student mobility: enabling graduates to develop multi-cultural skills and increasing the quality of universities. We isolate three effects: 1) a competition effect that raises quality; 2) a free rider effect that lowers quality; 3) a composition effect that influences the relative strengths of the two previous effects. The effects lead to a trade-off between the two goals. Full mobility may be optimal, only when externalities are high. In this case, student mobility yields inefficiently high educational quality. For moderate externalities partial mobility is optimal and yields an inefficiently low quality of education.

AbstractWe study contracting between a public good provider and users with private valuations of the good. We show that, once the provider extracts the users' private information, she benefits from manipulating the collective information received from all users when communicating with them. We derive conditions under which such manipulation determines the direction of distortions in public good provision. If the provider is non‐manipulative, the public good is always underprovided, whereas overprovision occurs with a manipulative provider. With overprovision, not only high‐valuation users, but also low‐valuation users may obtain positive rents—users may prefer facing a manipulative provider.