We present an equilibrium model of the market for higher education. Our model simultaneously predicts student selection into institutions of higher education, financial aid, educational expenditures, and educational outcomes. We show that the model gives rise to a strict hierarchy of colleges...

The goal of this paper is to provide a comprehensive empirical analysis of majority rule and Tiebout sorting within a system of local jurisdictions. The idea behind the estimation procedure is to investigate whether observed levels of public expenditures satisfy necessary conditions implied by...

We formulate a notion of stable outcomes in matching problems with one‐sided asymmetric information. The key conceptual problem is to formulate a notion of a blocking pair that takes account of the inferences that the uninformed agent might make. We show that the set of stable outcomes is...

The authors provide conditions on an exchange economy with asymmetric information that guarantee that when the economy is replicated sufficiently often, there will be an allocation that is incentive compatible, individually rational, and nearly efficient. The main theorem covers both the case in...

We examine a general equilibrium model with asymmetrically informed agents. The presence of asymmetric information generally presents a conflict between incentive compatibility and Pareto efficiency. We present a notion of informational size and show that the conflict between incentive...