Review of Economics
Jahrbuch für Wirtschaftswissenschaften
Editor-in-Chief: Berlemann, Michael
Ed. by Haucap, Justus / Thum, Marcel
3 Issues per year
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Zur Ökonomik des Konsumentenschutzes im Hochschulsektor
Based on the economics of consumer protection and some contributions from the economics of education, the present paper presents an analytical framework to deal with the problem of consumer protection in the higher education sector. It is shown that there are not only governmental mechanisms (information provision, quality regulation) but also market-based mechanisms (seller signaling, private certification, private information intermediaries, student screening) to mitigate the informational asymmetry between buyers and sellers of educational services. This informational asymmetry, called students’ ex-ante quality uncertainty, provides the central economic rationale for thinking about student protection, quality assurance, and consumer information in the higher education marketplace. The basic argument of this paper is that governmental quality assurance is unnecessary in higher education if the market participants themselves, with the help of private third parties (i. e., certifiers and information intermediaries), are able to cope with market failure due to asymmetric information.