Too Much Competition in Higher Education? Some Conceptual Remarks on the Excessive‐Signaling Hypothesis

Abstract

Within the economics of higher education, there is a small but influential literature that describes and analyzes the outcomes of competitive processes on markets for higher educational services. Colleges and universities in the United States currently invest a vast amount of resources in order to attract well‐qualified students. Costly activities like advertising, infrastructure investments, the recruitment of academic stars, or the granting of merit‐based tuition discounts can be interpreted as different forms of “market signaling” in the sense of Spence. According to some social science authors, these signaling activities have reached a dimension that has to be classified as excessive or socially wasteful from a welfare‐economic viewpoint. The present article makes some conceptual remarks on this excessive‐signaling hypothesis, and intends to contribute to the debate about the (potentially) harmful and beneficial effects of competition in higher education.

Spatial recruiting competition in Chinese higher education system

“…Individually, rational behavior of higher education institutes leads to a collectively undesirable market outcome. Conversely, by focusing on some fields, higher education institutes with limited resource can achieve competitive advantage in those fields and attract top students to come (Mause 2009b). Such kind of competition scenario has also been captured by the followership strategy in Fig.…”

“…In the same year, Peking University, Beijing University of Aeronautics and Astronautics, Beijing Normal University, Nankai University, Fudan University, Xiamen University, and the University of Hong Kong also formed a treaty organization to joint recruit students. To some extent, such kind of cooperation eases the tension among competitive universities and avoid social waste (Mause 2009a), which has been predicted by the leadership and followership strategic portfolio illustrated in Fig. 2.…”

Acreditación y desarrollo de capacidades organizacionales en las universidades chilenas.

“…En el ámbito de la educación superior, este fenómeno ha sido extensamente estudiado, en especial en el sistema de educación superior norteamericano. La señalización de mercado en este contexto se expresa, en general, en la contratación de "estrellas" académicas, en la alta prioridad que se asigna a la publicidad y las relaciones públicas, en políticas de becas notoriamente visibilizadas, en obtención de certificaciones de acreditación y en la participación en rankings (Mause, 2009(Mause, , p.1120Newman, Couturier & Scurry, 2004, pp. 14-15).…”

Examining Competition in Ontario’s Higher Education Market

“…The reduction of public funds and the need to find other sources of revenues have forced universities to operate in a new competitive environment and to adopt market competitive tools. Mause (2009) noted that many universities have employed marketing processes such as running advertising campaigns, creating information brochures, offering campus tours, investing in infrastructure, offering merit-based tuition discounts, investing in sports, participating in rankings, and recruiting qualified faculty and staff members to compete and to generate other sources of revenues (p. 1108). Indeed, employing these competitive variables is costly; therefore, analyzing their effects is, arguably, important for leaders of academic institutions and for policy makers.…”