full title: Run with the hare and hunt with the hounds: Colleges as platforms in the market for higher education

abstract: Standard economic theory suggests that more students are beneficial for colleges because they generate additional revenue. However, students are only one set of agents that are connected to colleges. There is also the group of professors who, besides teaching, contribute to an institution's income and prestige by acquiring research grants and engaging in research. Yet, they may experience disutility from teaching so that an increasing number of students can negatively affect a professor's utility. The incorporation of spillover effects or externalities within and between these groups of agents has been overlooked in the theoretical literature on the economics of higher education. I fill this gap by proposing to treat colleges as intermediaries in two-sided markets that serve the competing interests of students and professors. Therefore, I propose a generic platform model and test the model with administrative data from German higher education and research institutions

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