We propose a model of strategic interaction between higher education institutions (HEIs) and the government. HEIs compete by choosing prices and education quality investment and government allocates the state-financed quotas between the universities.
The paper presents the selected parts of the translation of the Chapter 10 Scenarios for Financial Stability of Tertiary Education of the publication Higher Education to 2030. Volume 2: Globalization published by OECD in 2009. It explores how tertiary education worldwide could develop in financial sustainable manner, providing an overview of the main alternatives for higher education financing today with an emphasis on different allocation models and suggestions on possible future scenarios for higher education financing.