Abstract

A static game-theoretic model is developed to examine the post-9/11 interaction between the higher-education sector and the visa authority. We analyze the determination of the sponsorship of foreign scholars by the former and of visa scrutiny level by the latter, when some of the applicants, unknown to either party, are potential terrorists. When some genuine scholars are denied visa mistakenly, the intensity of visa screening is higher than its efficient level, but the number of students sponsored by the universities may or may not be higher. When delays associated with visa scrutiny cause some genuine scholars to be unable to enter, both the number of foreign scholars sponsored and the intensity of visa scrutiny are higher than their efficient levels. Under the same case, as the proportion of bad applicants (who are potential terrorists) for visas increases, the number of foreign scholars sponsored and the intensity of visa scrutiny increases, while there is a decline in the proportion of visa applicants granted visas. The basic analysis is extended to the case where the pool of applicants is endogenous.