Behavioral and Experimental Economics

Summer School Experimental Economics

The Behavioral and Experimental Economics group has an influential position in this field in the Netherlands and Europe. CREED, the Amsterdam-based group, focuses particularly on three main projects: economics of political decision making; bounded rationality and institutions and experimental economics. The research of the Rotterdam-based group focuses on two broad themes: decision under risk and uncertainty and intertemporal choice.

Cooperative Behavior, Strategic Interaction and Complex Systems

This research group focuses on: (non-)cooperative game theory; nonlinear dynamics and complex systems; bounded rationality, learning and heterogenous expectations; dynamic models of collective behavior and social networks & dynamic optimization.

Econometrics and Operations Research

Research themes: time series econometrics, panel data, Bayesian econometrics, applied econometrics and econometric methodology. Applications can be found in areas as diverse as monetary economics, labor economics, marketing and asset pricing. Some fellows in this group focus on operations research.

Finance

The Finance group at TI spans many of the core fields in finance: asset pricing, corporate finance, financial econometrics, market microstructure, and financial institutions.

Labor, Health, Education and Development

At TI, a large group of fellows works in different areas of labour, health, education and development.

Macroeconomics and International Economics

Fellows in the Macroeconomics and International Economics group carry out research on growth, innovation, international trade and factor mobility, the role of economic geography, banking and monetary economics, and fiscal policy.

Organizations and Markets

The Organizations and Markets (OM) group spans many areas in (applied) microeconomics, including the economics of organizations, industrial organization, entrepreneurship, innovation, and auctions.

Spatial, Transport and Environmental Economics

The STEE group addresses four themes: urban and regional dynamics, land use, transportation, and environment and resources. Many fellows combine policy research with fundamental research.

Author(s)
Email
viaene@ese.eur.nl
Journal
Journal of Public Economics, 2013 (108), 78-89.

Recent criticism from different sides has expressed the view that, with scarce resources, there is little justification for massive public funding of higher education. Central to the debate is the conjecture that colleges and universities use their resources inefficiently and focus insufficiently on their mission to expand students’ human potential. Our aim in this paper is to examine the theoretical premises of this conjecture in a small open economy and uncover the conditions under which public investment in higher education is efficient and desirable. We analyze non-stationary equilibria of an OLG economy, characterized by perfect capital mobility, intergenerational transfers and a hierarchical education system. The government uses income tax revenues to finance basic education and support higher education that generates skilled labor. Given this, the following issues are considered: (a) the impact of education and international markets on the equilibrium number of low-skilled and skilled workers in each generation; (b) the economic efficiency of public subsidies to higher education in generating skilled human capital; (c) the endogenous support for a government’s educational policies found in a political equilibrium.