A multiperiod, theoretical model characterizes the relationship between a publication that ranks universities and prospective students who might use this ranking to decide which university to attend. The published ranking offers information about the universities’ objective quality but also affects their prestige, which may increase student utility. This prestige effect gives the commercial publication incentive to act contrary to the best interest of the students. If a ranking created with the commonly used attribute-and-aggregate methodology creates prestige, then to maximize profit the publication needs to (1) choose attribute score weights that do not match student preferences and (2) alter those attribute score weights over time, even in the absence of changes to student preferences and/or education technology. Without a prestige effect, the publication should choose attribute score weights that match student preferences. This model also defines a student-optimal ranking methodology that maximizes the sum of the students’ utilities. The results offer insights for prospective students who use existing rankings to choose a university, as well as which ranking designs would better align with students’ preferences.
All Science Journal Classification (ASJC) codes
- Business and International Management
- Economics and Econometrics